Urbanization — migration away from the suburbs to the central city — will be the biggest real estate trend in 2015, according to a new report. The report says America’s urbanization will continue to be the most significant issue affecting the industry, as cities across the country imitate the walkability and transit-oriented development making cities like New York and San Francisco so successful. As smaller cities copy the model of these “24-hour cities”,more affordable versions of these places will be created. The report refers to this as the coming of the “18-hour city”,and uses the term to refer to cities like Houston, Austin, Charlotte, and Nashville, which are “positioning themselves as highly competitive, in terms of livability, employment offerings, and recreational and cultural amenities.” Another trend that looks significant in 2015 is that America’s largest population group, Millennials (千禧一代),will continue to put off buying a house. Apartments will retain their appeal for a while for Millennials, haunted by what happened to home-owning parents. This trend will continue into the 2020s, the report projects. After that, survey respondents disagree over whether this generation will follow in their parents’ footsteps, moving to the suburbs to raise families, or will choose to remain in the urban core. The survey projects that this population cohort will evolve and segment over time, and warns against painting the generation with too broad a brush. Another issue affecting real estate in the coming year will be America’s failing infrastructure. Most roads, bridges, transit, water systems, the electric grid, and communications networks were installed 50 to 100 years ago, and they are largely taken for granted until they fail. The report’s writers state that America’s failure to invest in infrastructure impacts not only the health of the real-estate market, but also our ability to remain globally competitive. Apart from the specific trends highlighted above, which cause some investors to worry, the report portrays an overall optimism borne by the recent healthy real-estate “upcycle” and improving economy. Seventy-four percent of the respondents surveyed report a “good to excellent” expectation of real-estate profitability in 2015. While excessive optimism can promote bad investment patterns, resulting in a real- estate “bubble”,the report’s writers downplay that potential outcome in that it has not yet occurred. Some respondents to the Emerging Markets survey call the urbanization trend “oversubscribed”,and the report concedes that there do exist some edge cities and suburbs with promise. But these places are few and far between. The most successful places are those built using urban-design principles — with density, walkability, and good transit. Real-estate investors in 2015 need to pay attention to the two main conclusion of the report: if a property resembles or relies upon sprawl in any way, or doesn’t appeal to Millennials, think before you invest.