1. A changing global economy. Although property in the United States is still attractive to foreign buyers, political conflicts and wars point to a slowing global economy. That translates into a slower real estate market, as well. The good news for Southwest Florida: Foreign money in commercial and residential markets is shifting away from large cities, where properties have become too expensive, to secondary and tertiary cities.
2. A retrenchment of the debt capital market. Debt markets for commercial real estate are down, and regulators are telling banks to curtail commercial real estate lending. In addition, many insurance companies that invest in real estate are approaching their allocation limits. This will be an opportunity for other types of lending to emerge for developers, like crowdfunding.
3. Shifting demographics. Boomers and millennials make up more than half of the country's population and in some places are competing for housing in the same walkable places with access to entertainment and amenities, like the Mercato. Because boomers took a financial hit during the recession, and millennials are still trying to gain a foothold in the market, both groups are showing a strong demand for rental housing. And since rents have been growing, they are becoming increasingly willing to accept smaller apartments if there are large communal spaces and plentiful amenities.
4. Higher density and urbanization. As roads become more crowded, access to transportation and live-work-play neighborhoods are becoming increasingly desirable as buyers demand cities that never sleep. "There's pressure on suburban places to become more urban," Lee said.
5. The political environment. Increasingly acrimonious political swipes on the national, state and regional level are dampening enthusiasm for buying real estate. On the flip side, localities that show political stability, invest in infrastructure and keep their tax bases low stand to profit.
6. Housing affordability and credit constraints. Stagnant wages, low inventory of affordable housing, and rising rents and home prices will continue to squeeze the workforce. Should interest rates rise, more people will be pushed out of the ranks of potential homeowners.
7. The disappearing middle class. Studies show that the median income for middle-class households fell almost 5 percent from 2000-14, while their median wealth dropped 28 percent after the housing bubble burst. To cope, more households need two incomes to make ends meet but are still falling behind. "Even educated millennials are a poorer generation than previous generations," Lee said. That's changed the face of retail, as retailers who traditionally appealed to the middle class, like Sears and Macy's, struggle. But retailers that appeal to the luxury market and at the opposite end of the spectrum, discounters, are doing better.
8. Unstable energy markets. The collapse in oil prices has threatened global economic security and decimated U.S. boom towns that were dependent on oil production. Rig counts are at their lowest levels in 50 years, Lee noted. Consequently, "alternative energy may become a more viable source of power," he said.
9. The sharing and virtual economy. From ride-sharing companies to virtual offices, the "shadow economy" is picking up steam and is weakly regulated. Some of these new enterprises are likely to muscle out traditional competitors. For instance, in some big cities, ZipCars, Uber, Lift and other new transportation choices are eliminating the need to own a car and are making garages, both public and private, obsolete. While Southwest Florida is still too car-centric for that, Lee said he expects the region's aging population will become increasingly receptive to the idea of ditching their wheels as driving becomes more difficult and the expense of car ownership more burdensome.
10. The rise of experiential retailing. As more buyers decide to buy online, malls are competing by selling experiences, such as bowling or restaurants, rather than things. Some are ditching chain department stores in favor of unique boutiques, and replacing anchor stores with food courts. Meanwhile, retailers will continue to put more effort into their online websites and use their actual stores as "showrooms and places to return things," Lee said.