The real estate recovery has been noticeably more sluggish than what many experts consider to be ‘normal’, due in large part to the US economy being held back by ongoing troubles in Europe and elsewhere. But as 2013 progresses, we can expect the housing industry to pick up pace considerably, with considerable advances made in all market segments, noticeable across the entire country, according to PriceWaterhouseCooper’s latest outlook.
PWCs Emerging Trends in Real Estate 2013 reports that investors will be chief among drivers of this burgeoning economic recovery as they struggle to improve yields, although many will remain frustrated as they achieve only modest gains at best. This will prove especially true in the commercial sector, where “decent though relatively disappointing” job creation, together with limited inventory, should bolster absorption and consequently reduce vacancy rates even further, making these kinds of properties more attractive.
This commercial real estate activity will also ripple through to other market segments, including the housing market. Single family home values are expected to inch up across the country as the foreclosure crisis finally comes to a conclusion and investors help to firm up markets by buying up remaining inventory in the hardest hit areas. PWC points to the fact that at some point, the US’s expanding population – amounting to two-to-three million annually – will inevitably lead to more demand for single family homes, and any upsurge here would likely ripple through the rest of the economy. As such, it’s likely that homebuilders will finally begin to see some action, something that we have already seen signs of after years of in activity.
However, Emerging Trends warns that the US real estate industry still has many issues to overcome, such as the inevitable rise in mortgage interest rates expected this year, and resolving ongoing loan-legacy problems in light of the coming wave of maturing commercial mortgage gains expected in the next three years.