Positive Signs Abound in the Single-Family Sector
By Keith Loria
In September, the Urban Land Institute released findings from its second semi-annual survey of the nation’s leading real estate economists and analysts. While the survey reveals scaled-back predictions for growth in the country’s economy, real estate capital markets and commercial real estate fundamentals, it also predicted healthy estimates for single-family housing as compared to estimates made six months ago.
“The predictions diverge from the previous forecast (from March) in that it is generally less optimistic regarding the economy and the performance of commercial real estate and more optimistic regarding the single-family housing sector,” said Dean Schwanke, Executive Director, ULI Center for Capital Markets and Real Estate, Washington, D.C.
The Real Estate Consensus Forecast surveyed 39 economists and analysts over the period of August 21 to September 14 and examined 26 economic and real estate indicators to come up with its predictions.
According to the report, single-family housing starts are projected to increase by 100,000 units in 2012 and 145,000 units in 2013. In addition, home prices are expected to rise 3.2 percent in 2012 and 3.9 percent in 2013.
“Finally, the single-family housing sector is experiencing a turnaround in 2012 that is expected to continue,” Schwanke said. “The ULI Consensus Forecast from March projected a stabilizing housing market in 2012, and the most recent numbers have been strong, leading forecasters to be even more optimistic going forward.”
Single-family housing starts, which have been near record lows over the past three years, are expected to rise from 430,600 starts in 2011 to 530,000 in 2012. They are projected to rise to 675,000 in 2013 and 800,000 in 2014. The 2012 and 2013 forecasts are up from the March forecast, while the 2014 forecast remains the same.
The average home price, which has declined somewhere between 1.4 percent and 3.9 percent over each of the past three years, according to the FHFA, is expected to increase by 3.2 percent in 2012, 3.9 percent in 2013 and five percent in 2014; all of these are well above the previous ULI Forecast from March.
Turning to the economy, the survey predicts employment will increase by 1.8 million jobs in 2012, 2.0 million in 2013 and 2.4 million in 2014. These numbers are also down from the last forecast, which projected 2.5 million new jobs in 2013.
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