The Urban Land Institute (ULI) recently released its latest Real Estate Economic Forecast, which predicts that real estate is poised for a rebound, particularly within the single-family housing sector.
The report includes responses from 42 surveyed economists and analysts from 39 real estate organizations.
“While the fall 2020 Forecast was notable in its reversal of many of the pessimistic forecasts from spring 2020, the current forecast goes even further, with several forecasts now ahead of long-term averages,” said ULI leading member William Maher, director of strategy and research, RCLCO. “Among the 2021–2023 metrics predicted to outpace long-term averages are GDP and employment growth, the unemployment rate, real estate transaction volumes, warehouse and apartment occupancy and rent growth, and single-family housing starts and price appreciation.”
According to the report, single-family housing starts are expected to continue increasing to 1.1 million in 2021 and to 1.2 million in 2022, staying flat through 2023. Home-price appreciation is expected to continue, but not at breakneck speeds as we saw for the 2020 – 2021 housing market. For 2021, ULI predicts home prices will increase 8.1%, but that drops down to 5% for 2022.
In the commercial space, transaction volume is expected to recover quickly through 2023. 2021 may see transaction volume at $500 billion, with 2022 at $550 billion.
Overall, GDP is expected to rise by 6.5% in 2021, up from -3.5% in 2020. It is expected to rise 3.9% in 2022 and 2.5% in 2023—an increase for 2021 over the October forecast, but a decrease for 2022.
To view the full report, click here.