The Urban Land Institute (ULI) has just put out its real estate forecast for 2012, and the news is phenomenal. The report is based on a survey taken by professionals in the real estate and financial industry. These experts give their views, based on their expertise and experiences, of how the future of Real Estate will pan out in the upcoming months. The report shows optimism throughout.
Take for instance, the experts‚Äô views on commercial real estate transactions. The general consensus is that real estate in the commercial market will flourish, going from a volume of $211 billion in transactions in 2011 to over $250 billion in 2012. By 2014, the volume would be as high as $312 billion if the forecast holds out.
As for REIT‚Äôs, the big show was in 2009 and 2010, with returns as high as 28%. By 2011, the rates had fallen to 8.3%. The REIT‚Äôs are not expected to rise to 2009 and 2010 levels, but experts do contend that they will switch directions and rise back to 10% in 2012.
Apartment vacancy rates have been very low in recent years, and the ULI report has them remaining low and perhaps going even a bit lower. This is good news for landlords, and would seem to indicate that more people are losing their homes. However, the outlook for home ownership looks promising as well.
The real estate professionals and economists taking part in the survey pointed to a reversal in the housing market beginning this year. In 2011, housing starts were very low, at about 428,000. In 2012, they are expected to increase to 500,000 and keep climbing to a whopping 800,000 by 2014.
After negative home price changes for the last three years, the experts do not expect home price to see either more decreases or any increases in 2012. However, they do predict increases of 2% in 2013 and 3.5% in 2014. It seems the days of holding onto your home to wait for better prices may have an end after all.
While these indications seem fairly positive for the most part, the ULI report has a few negative notes to add. These come mainly in the office, warehouse and hotel sectors. It is not a major concern, because even with the declines in some of the numbers, most are still well above the figures of those in the recent past.
The outlook for real estate is looking bright indeed, at least according to those who completed the survey which was compiled and interpreted by the ULI this March. It is great news for real estate investors, homeowners, and landlords. This report provides hope where, for so long, hope has been scarce at best.
ULI Real Estate Consensus Forecast