The U.S. economy, as well as U.S. real estate capital markets and real estate fundamentals, will either improve or “remain healthy,” in the next three years, according to the Urban Land Institute’s Real Estate Consensus Forecast covering real estate and the economy, released today.
On the commercial side, the report’s forecast is quite sunny. The transaction volume for commercial properties should increase by almost 50 percent, and the volume of commercial mortgage-backed securities is expected to more than double. Institutional real estate assets and REITs should be providing 8.5 to 11 percent annual returns, says the report, which is based on interviews with 38 real estate economists.
The overall economy, which leads real estate as an indicator generally, is also looking up, according to the report. Real gross domestic product is expected to grow by 2.5 percent in 2012, 3 percent in 2013, and 3.2 percent in 2014. Meanwhile the unemployment rate should fall to 8 percent by the end of 2012, 7.5 percent by the end of 2013, and 6.9 percent by the end of 2014, experts told ULI. — Guelda Voien