The real estate industry is expected to strengthen this year and continue to get stronger through 2017, according to a new report released from the Urban Land Institute Center for Capital Markets and Real Estate, which is based on a survey of the industry’s top economists and analysts.
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Survey respondents said that the residential, single-family housing sector remains in recovery mode and economists predict that housing starts will rise from 647,000 in 2014 to 700,000 in 2015; to 815,000 in 2016; and 900,000 by the end of 2017.
Economists predict that existing home prices will rise through 2017 -- rising 5 percent this year; another 4 percent in 2016; and by 4 percent in 2017.
"In summary, almost all U.S. real estate participants would be very pleased if the future unfolded as predicted by the ULI consensus forecast," says ULI leader William Maher, director of North American strategy for LaSalle Investment Management in Baltimore. "The forecast represents almost the perfect combination of strong economic and property market fundamentals, combined with an orderly wind-down of monetary stimulus."
Although an economic downturn could throw off these predictions, as well as interest rate spikes or oversupplies, "real estate pros predict three more years of smooth sailing for U.S. real estate," Maher adds.
Survey respondents were also upbeat with their forecasts for the commercial market, including: