The Urban Land Institute asked 38 leading real estate economists and analysts from across the country when to expect better times for the commercial and residential construction industries. The consensus? Sunnier times are indeed ahead, but change will come slowly. Here's what to expect over the next three years:
Commercial property transaction volume will increase almost 50 percent.
Commercial mortgage-backed securities (CMBS) are expected to more than double.
Real estate investment trusts (REITs) should provide returns ranging from 8.5 to 11 percent annually.
Office, retail and industrial vacancy rates are expected to drop 1.2 and 3.7 percentage points; apartment vacancies will be stable and hotel occupancy rates will rise.
Rents (for all property types) will increase from a range of 0.8 percent for retail to 5 percent for apartments.
Housing starts will nearly double by 2014, and home prices will begin to rise in 2013, gaining 3.5 percent during 2014.
For residential real estate news contact Jim Buchta at 612-673-7376, jim.buchta@startribune.com.
For commercial real estate news contact Janet Moore at 612-673-7752, janet.moore@startribune.com.
