PwC and the Urban Land Institute have released its latest “Emerging Trends in Real Estate” report, breaking down key opportunities, risks, and market shifts for investors, developers, and city leaders.
“The past few years have tested the industry’s ability to pivot,” said Andrew Alperstein, a partner with PwC’s U.S. real estate practices. “In today’s environment, we’re seeing a renewed focus on core fundamentals and deploying capital into high-growth areas. From the rapid evolution of artificial intelligence infrastructure to the growing demand for senior housing, the opportunities in 2026 will favor those who combine speed, data-driven insight, and long-term strategic vision.”
The 47th edition of the report draws on insights from over 1,700 leading real estate investors, lenders, and advisers across the United States and Canada, identifying risks and market shifts for the coming year.
“Technology continues to play a significant role in driving the U.S. economy, and it’s exciting to see the real estate sector beginning to integrate those advances to harness that power more effectively,” added ULI global CEO Angela Cain. “We continue to see interest from high-growth asset classes, including data centers, senior housing, and self-storage. Combined with the expectation of interest rate cuts, there’s a cautious optimism in the industry as we head into 2026.”
Of the 27 subsectors in the report, senior housing ranks second for investment and development prospects, coming in behind data centers. The report noted that with the first baby boomers turning 80 next year, the potential wave of demand is elevating senior housing to the top of the list for apartment investment prospects. In addition, year-over-year inventory growth in 2025 at 1% is at its lowest level since 2006, pushing occupancy rates close to historic highs.
After senior housing, moderate-income/workforce housing and single-family rentals are tied for investment prospects for 2026. According to the report, limited development of middle-income housing, for-sale or rent, has tightened vacancy rates. With potential home buyers on the sidelines because of affordability, they are increasingly turning to single-family rentals for more space.
At the bottom of the apartment investment prospects are luxury apartments. With the concentration of new supply on the high end of the market, there are fewer options for moderate-income households. However, this subsector’s score is still a significant improvement from where it was pre-pandemic and the post-pandemic low in 2024.
The report also noted that following a strong rebound in 2024, the student housing outlook is complex. While the sector has seen near-record absorption, high occupancy, and steady rent increases, demographic headwinds, ongoing visa delays, and rising construction costs create uncertainty. According to the report, investment prospects for this subsector rank above high-end apartments. It also has the largest share of hold respondents in the buy-hold-sell recommendations.
The report also breaks down the top 10 markets to watch in the coming year. Industry participants were asked to rate markets for investment and development prospects in 2026 across property types, and to rate aspects of their local markets. These ratings were combined and calculated to determine the overall real estate market rankings:
- Dallas/Fort Worth
- Jersey City, New Jersey
- Miami
- Brooklyn, New York
- Houston
- Nashville, Tennessee
- Northern New Jersey
- Tampa/St. Petersburg, Florida
- Manhattan, New York
- Phoenix