Report
Real Trends The Future of Real Estate in the United States

In this report, we venture into the future of real estate markets and products.

Our definition of "real estate" for this purpose is not limited to buildings —such as homes, apartments, hotels, retail malls, offices, factories, and warehouses. Our definition also includes the social relationships that are formed and take place therein: How will we live, work, and socialize during

the next decades?
Our work further considers relevant trends in economic and financial

markets, and how real estate markets mediate local and regional mobility or population growth. We also devote some time to the evolution of businesses that provide services to the real estate industry: leasing, transactions, energy, and the like.

Hundreds of innovations and ideas hit the marketplace during any given month. We could not possibly include them all. Conversely, some of the technologies and trends that we do identify will turn out to be irrelevant or peter out in popularity. We have made a conscious effort to carefully triage our findings, retaining what we see as possible trends and discarding prod- ucts and ideas that are obviously hyped by their promoters. We apologize for any remaining unintended boosterism, and for the inevitable omissions and oversights.

We have structured the report in six chapters. In the first chapter, we tackle the impact of demographic change. This is the lowest-hanging fruit because the changes that will shape America’s population are taking place right now. Our nation will be larger and older, and regional growth dispari- ties will continue. Family structures will favor small households, although they will not be much smaller than today’s.

Chapter 2 is devoted to the urgent issue of affordable housing. In some metropolitan areas of our country housing is getting extravagantly expen- sive. In all areas, real estate prices are rising much faster than other manu- factured goods. Here we examine some of the most promising ideas that could help alleviate the housing affordability problem in the future. The outlook for a comprehensive solution to the affordable housing crisis is bleak, given the lack of national consensus about redistribution of income policies. Nonetheless, a toolbox of technological and institutional solutions exists. We expound on some of the tools we regard as promising in the hope that some combination of them proves to be effective.

In Chapter 3 we conjecture about new and forthcoming innovations that have to do with physical space, building shapes, real estate products, and innovations in the usage of existing edifices. What new structures

3 Sponsored by:

will be erected and lived in? How will we work in offices? What is the future of retail spaces? We start by highlighting some of the new types of buildings that are emerging. We talk briefly about the need for green real estate paradigms, and at length about how the 21st-century transportation revolutions will impact real estate. New modes of human interaction with space are additionally explored.

We then move in Chapter 4 to the technological building add-ons: sen- sors, cameras, computing devices, networks. Automatized feedback loops will make building operations more efficient and seamless. Data analysts will strategically use the engineering, behavioral, and financial data gener- ated by these devices to improve our quality of life—and corporate bottom lines too. Combining the Internet of Things with data clouds and machine learning will make our buildings smarter; with some becoming akin to giant robotic structures.

Chapter 5 discusses computer and online technologies that are trans- forming the property market without changing its physical structures. New business models are emerging to facilitate transactions and leasing. Busi- ness leaders increasingly are making decisions based on analyses of big data. And internet crowdfunding has become a viable alternative for raising capital. 3D models and augmented reality are literally changing the way in which we see the built environment, and they ultimately will effect its design, development, and construction management processes. Dozens of internet startups are being born to support the real estate services industry. And more are on the way. How many of them will survive and prosper?

Chapter 6 summarizes the highlights of the report: trends that we feel most comfortable betting on. We hope readers enjoy this voyage through our imagined future of real estate as much as we enjoyed writing about it. 

Title
Publication TypeReport
Year of Publication2017
AuthorsSaiz A, Salazar A
InstitutionMIT
CityCambridge, MA
Abstract

In this report, we venture into the future of real estate markets and products.

Our definition of "real estate" for this purpose is not limited to buildings —such as homes, apartments, hotels, retail malls, offices, factories, and warehouses. Our definition also includes the social relationships that are formed and take place therein: How will we live, work, and socialize during

the next decades?
Our work further considers relevant trends in economic and financial

markets, and how real estate markets mediate local and regional mobility or population growth. We also devote some time to the evolution of businesses that provide services to the real estate industry: leasing, transactions, energy, and the like.

Hundreds of innovations and ideas hit the marketplace during any given month. We could not possibly include them all. Conversely, some of the technologies and trends that we do identify will turn out to be irrelevant or peter out in popularity. We have made a conscious effort to carefully triage our findings, retaining what we see as possible trends and discarding prod- ucts and ideas that are obviously hyped by their promoters. We apologize for any remaining unintended boosterism, and for the inevitable omissions and oversights.

We have structured the report in six chapters. In the first chapter, we tackle the impact of demographic change. This is the lowest-hanging fruit because the changes that will shape America’s population are taking place right now. Our nation will be larger and older, and regional growth dispari- ties will continue. Family structures will favor small households, although they will not be much smaller than today’s.

Chapter 2 is devoted to the urgent issue of affordable housing. In some metropolitan areas of our country housing is getting extravagantly expen- sive. In all areas, real estate prices are rising much faster than other manu- factured goods. Here we examine some of the most promising ideas that could help alleviate the housing affordability problem in the future. The outlook for a comprehensive solution to the affordable housing crisis is bleak, given the lack of national consensus about redistribution of income policies. Nonetheless, a toolbox of technological and institutional solutions exists. We expound on some of the tools we regard as promising in the hope that some combination of them proves to be effective.

In Chapter 3 we conjecture about new and forthcoming innovations that have to do with physical space, building shapes, real estate products, and innovations in the usage of existing edifices. What new structures

3 Sponsored by:

will be erected and lived in? How will we work in offices? What is the future of retail spaces? We start by highlighting some of the new types of buildings that are emerging. We talk briefly about the need for green real estate paradigms, and at length about how the 21st-century transportation revolutions will impact real estate. New modes of human interaction with space are additionally explored.

We then move in Chapter 4 to the technological building add-ons: sen- sors, cameras, computing devices, networks. Automatized feedback loops will make building operations more efficient and seamless. Data analysts will strategically use the engineering, behavioral, and financial data gener- ated by these devices to improve our quality of life—and corporate bottom lines too. Combining the Internet of Things with data clouds and machine learning will make our buildings smarter; with some becoming akin to giant robotic structures.

Chapter 5 discusses computer and online technologies that are trans- forming the property market without changing its physical structures. New business models are emerging to facilitate transactions and leasing. Busi- ness leaders increasingly are making decisions based on analyses of big data. And internet crowdfunding has become a viable alternative for raising capital. 3D models and augmented reality are literally changing the way in which we see the built environment, and they ultimately will effect its design, development, and construction management processes. Dozens of internet startups are being born to support the real estate services industry. And more are on the way. How many of them will survive and prosper?

Chapter 6 summarizes the highlights of the report: trends that we feel most comfortable betting on. We hope readers enjoy this voyage through our imagined future of real estate as much as we enjoyed writing about it. 

URLhttps://mitcre.mit.edu/wp-content/uploads/2017/10/REAL-TRENDS-MIT.pdf