Citylab (referencing this report by the National Association of Realtors) takes another look at foreign investors (specifically Chinese investors) in the US housing market. Key point: “As a group, [Chinese buyers] surpass top buyers from Canada, the U.K., Mexico, and India. Between April 2016 and March 2017, Chinese buyers purchased more than 40,500 housing units, worth a total of $31.7 billion. That’s up from of 29,000 units and $27.3 billion the year before. Sixty-seven percent of those units were single-family homes, and 61 percent of all sales were made in suburban areas.” What’s really interesting, however, is if you look at the data in the NAR report. After Chinese buyers, the biggest foreign buyers in the residential market in the US are Canadians. Makes me wonder, if Canadian investors are willing to spend this much money on real estate in the US with the exchange rate where it is, how much are they spending on investment properties in Canada? It’ll be interesting to see how this rolls out with the new measures as well as further measures coming up (Globe and Mail did a quick take).
The bike-sharing evolution continues with more dockless bikeshares popping up. Dockless systems are really going to be the key to shifting more people to cycling. They just provide that ease and convenience; you can pick it up anywhere (provided there’s one nearby) and drop it off anywhere. I wonder how this affects the services operations when bikes need to be relocated to keep up with high-demand areas.
Bisnow has a good discussion on the role that neuroscience is playing in the design of cities. The article is an overview of the relationship between urban design and behavioral psychology. It’s been fascinating to watch psychology take over the field of economics and slowly make it’s way to other disciplines (one of the pioneers in behavioral economics, BEWorks, is hosting a “nudgethon” for public transit in Toronto in September). While the recognition is new, the notion that urban design ought to follow user experience rather than imposed design goes as far back as Jane Jacobs, who promoted an observational and ethnographic approach to urban planning in The Death and Life of Greater American Cities. Since then, planners have called for a rejection of rigid land-use models (such as euclidean zoning) and promotion of flexible uses (such as mixed-use and form-based zoning). Architect David Galbraith takes it a step further and encourages designs that allow for organic development. As he states in the post: “Cities of the industrial age looked mechanical, cities of the information age can look like fractal networks — like nature.” His solutions seem to echo how Japan manages its zoning code (for reference, in a simple video).
On the tech side, one of the really exciting things coming up mostly-behind-the-scenes is proptech (property+technology), or the intersection of real estate and technology. A classic case of this is how traditional realtors have been embracing tech, though it’s still focused on helping people find a house to purchase (I’m sure I can find more interesting examples if I actually search around). Here’s an interview from ZDnet with a data scientist from Zillow if you want a little case study. Now I’m not too familiar with Zestimate, but if anyone wants to get into the weeds, Kaggle has a competition on improving the error rate for the Zestimate.
The Toronto Star reports on renting in Toronto, where rents for housing have reached highs comparable to London and Brooklyn. The article describes how people feel like apartment hunting has become similar to dating, where everyone must now create a profile to attract landlords and get them to “swipe right”.
Bloomberg reports that London’s housing prices have flat-lined. The article puts forward quotes from several authorities on real estate economics, but the gist of it is that housing prices went well beyond normal ranges in the last few years and are slowing to “normal” levels. In another article, Bloomberg reports that luxury properties are taking a hit as well.
In the realm of today’s infrastructure that will be obsolete tomorrow, consider gas stations. We all envision a world of autonomous electric vehicles, so what happens to the gas stations? Likely they’ll be redeveloped and reclaimed by the city, or become electric charging stations, but in the meantime, how about art?
Consumer values are crossing geographic boundaries, as marketers are increasingly seeing similar tastes and preferences in demographic cohorts in a globalized world. I suppose this is something new for marketing, but in broader demographic analysis I always found it frustrating how these cohorts/categories are made. “Millennial” preferences really just refer to things young people do, and whether one is young (in terms of tastes and preferences) is increasingly more a product of one’s life stage than age. Single 35-year-olds share more in common with single 25 year-olds than coupled 35-year-olds, and the same applies in the other direction. Tastes and preferences are more influenced by major life events than people realize.
The Guardian took a brief look at the “future gazing industry” (that includes people like me) and how it’s grown in the recent past. I really enjoy the process of forecasting and the insights it brings. People mistakenly assume it’s some black-box calculator when in fact it’s just a way of doing research and synthesizing information, together with a healthy dose of probability analysis. Something to really appreciate about this work, though, is how a good forecast has less to do with fancy insights and mathemagic (of the sort pundits become famous for) but more for its ability to build consensus. There’s a lot to say, but I should save it for a separate post.
In light of the many measures the Province of Ontario is taking to cool the housing market here, some rather interesting measures are being proposed in California. The state, particularly the San Francisco Area, has seen housing prices skyrocket in the last several years. In the face of a major affordability crisis, homeowners are facing off against municipalities and those who have been priced-out of the market in a battle between maintaining character and increasing densities and housing supply (sound familiar?). This is an interesting echo of what is happening in the GTA, though Ontario is contemplating amending the OMB to give local communities more say, while California is contemplating a fast-track process for affordable housing developments that will circumvent the rezoning process.
Not content enough with selling books, electronics, knick-knacks and soon fresh produce, Amazon is allegedly moving into online residential real estate services. The page which tipped GeekWire off has been taken down, but it would be an interesting move at a time when the realtor industry is rapidly digitizing (from searching for properties online to doing property showings on Snapchat and Instagram).
More exciting news as Elon Musk tweeted that he has “verbal” approval to start digging a tunnel between New York and Washington D.C. Initial thoughts on it sound like a legitimate test for his tunnel boring project as well as the Hyperloop. I’ve been very skeptical that the Hyperloop really was anything more than a pipe dream, but Musk has accomplished some rather extraordinary things since he got into the transport business, so I’ll remain cautiously optimistic.