Real Estate To Stay Strong For 2 More Years


                                                                     



                   



                 
                Real Estate To Stay Strong For 2 More Years
NEW YORK – Oct. 7, 2015 – Expect at least three more years of favorable real estate conditions, with the overall housing market projected to continue expanding at steady levels through 2017, according to a new survey from the Urban Land Institute Center for Capital Markets and Real Estate. The results are based on predictions from 49 of the real estate industry's top economists and analysts.
Compared to previous forecasts, the latest ULI forecast is less bullish on its outlook, however.
Overall, real estate indicators are expected to be better than their 20-year averages through 2015 – but the economists predicted that a few real estate indicators won't perform as well: commercial property price growth, equity REIT returns, retail availability rates and single-family housing starts.
"The latest Consensus Forecast has picked up on recent growth concerns and stock market corrections around the world," says William Maher, ULI leader. "The U.S. economy and real estate markets are in much better shape than most other countries, but global economies and capital markets are increasingly inter-related.
"Still, the vast majority of indicators in the forecast indicate favorable economic and capital markets in the U.S., as well as moderately strong real estate fundamentals and investment returns."
Additional ULI Consensus Forecast highlights
  • Commercial property transaction volume is predicted to rise for another two years and then level off to $500 billion by 2017.
  • Commercial real estate prices are forecasted to rise by 10 percent in 2015 and then slow to a 6 percent increase in 2016 and to 4.5 percent in 2017 – below the long-term average growth rate.
  • Vacancy rates are projected to decrease slightly for office and retail over the next three years. On the other hand, industrial availability rates and hotel occupancy rates are projected to improve in 2015 and then basically plateau in 2016 and 2017.
  • Single-family housing starts are projected to increase to 745,000 in 2015, 842,000 in 2016 and 900,000 in 2017. Despite the increases, starts are expected to remain below the 20-year average.
  • Home prices are expected to moderate to a 5 percent growth rate this year, 4.3 percent in 2016 and 3.9 percent in 2017.
Source: Urban Land Institute
 © Copyright 2015 INFORMATION, INC. Bethesda, MD (301) 215-4688
 

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