Amazon’s HQ2 decision is months away, not expected to come down until at least 2018 sometime. That fact did not get in the way of 238 cities and regions in 54 states, provinces, districts, and territories proposing to become the place Amazon chooses for a future of billions in investment and 50,000 high-paying jobs.

So somewhere, unbeknownst to that place that will ultimately host the online retail juggernaut, people who develop, design, and build new homes and communities are going to do very well.

Meanwhile, builders need to feed their machines, and the best way they can do that is to make investments in submarkets of markets whose economic growth matches well with product and community lines that they develop and build exceptionally well.

Each year the Urban Land Institute dives deep into the macro trends and the micro drivers that stretch out ahead, and this year’s “Emerging Trends in Real Estate

” is among the best reports available for looking both thematically and specifically about the triggers of risk and opportunity in the markets nearest and dearest to residential developers and builders.Real estate has been soaring as of late, and thankfully so. This year’s discussions in Emerging Trends in Real Estate® focus on managing the descent safely, keeping in mind the lessons of past bumpy touchdowns.

Fortunately, a sudden drop in altitude does not seem to be in the offing. Instead, our survey respondents, focus groups, and interviewees expect a long glide path for the economy and for the industry—the extension of the current cycle for 2018 and perhaps beyond.

The report’s specific “Markets to Watch” section is a perennial favorite, with rankings in both “Overall Real Estate” and “Homebuilding Prospects.” While major markets have tended to draw the most attention due to strong job growth, there’s debate as to whether that momentum has played out as secondary markets start to show a glimmer of promise.

As the real estate industry positions itself for the “long glide path to a soft landing,” is it changing the way it evaluates expected market performance? “At this point in the real estate cycle, I’m not seeing a lot of investor interest outside the top markets,” according to a pension fund investor analyst. “Investors still want to maximize returns, but are sensitive to taking on too much risk.” A contrary opinion was expressed by a portfolio manager for an institutional investor: “Investors may want to take a harder look at some of the top secondary markets, particularly those with the top-performing submarkets.” The difference in opinion expressed by these interviewees isn’t unique. It appears that as the real estate recovery moves into its eighth year, market opinions may well be getting more diverse.

Here’s a snippet of the rankings in both categories, overall real estate and home building, for any who may still need to move chips into land investment in the next 12 to 18 months.



It might not need noting that the nation’s No. 2-ranked builder by volume and No. 1 in revenue, just bid big on a transaction that would take it into the first and fourth ranked markets for home building prospects. Hmmm.