The Urban Land Institute released its semi-annual Real Estate Consensus Forecast, in which it surveyed 38 leading real estate economists and analysts from “major real estate investment, advisory, and research firms and organizations” about their views on the upcoming real estate market.
And it looks like good news. Or, rather, it looks like the consensus is that we’ll be getting good news.
Over the next three years, those real estate experts expect “broad improvements for the U.S. economy, real estate capital markets, real estate fundamentals, and housing,” and “believe that most facets of the U.S. real estate economy will strengthen considerably or remain healthy through 2014.”
I’m tempted to cut and paste huge sections of this report, ’cause it’s chock full of good and useful data. I shall refrain. Mostly. Here are a few highlights.
In the commercial sector
- Commercial property transaction volume is expected to increase by nearly 50%.
- Institutional real estate assets and REITs are expected to provide returns ranging from 8.5% to 11% annually.
- Vacancy rates are expected to drop between 1.2 and 3.7 percentage points for office, retail, and industrial properties and remain stable at low levels for apartments.
- Rents are expected to increase for all property types
- Housing starts should nearly double by 2014
- Home prices should begin to rise in 2013, with prices increasing by 3.5% in 2014.
- Commercial real estate transaction volume will rise about 18% in 2012, 16% in 2013, and 8% in 2014.
- Issuance of commercial mortgage-backed securities is expected to increase “briskly”.
In the residential sector
- Single-family housing starts are expected to rise 16% in 2012, 32% in 2013, and 21% in 2014.
- The average home price should stabilize in 2012, then increase 2.0% in 2013 and 3.5% in 2014.