The Washington-based Urban Land Institute is predicting that the current real estate industry recession brought on by the COVID-19 outbreak and economic shutdown will more than likely be seeing its end by early next year.
The institute’s Real Estate Economic Forecast is also predicting increased Gross Domestic Product growth for both next year and 2022.
Based on interviews with 39 economists as well as 35 real estate analysts, the report additionally indicates that the lengthy decline seen during the Great Recession will not be repeated with the COVID downturn, forecasting an upsurge in employment beginning by the end of this year, with the creation of up to 4 million new jobs in both 2021 and 2022.
This means that the current 17 percent national unemployment rate could decline to just a little over 11 percent by the end of this year, with an equally swift drop to 5.9 percent by 2022.
Despite these promising predictions, economists and real estate analysts in the report are also blunt in noting that the economic consequences of the virus outbreak have been severe, hitting all aspects of the national real estate market.
The report notes that prices in the hotel, retail, and office sector have all been in decline, and that apartment growth is expected to fall by 2 percent before the year is out.
In a statement, William Maher said that even though many have predicted that the COVID-19 real estate market would be worse than what was seen during the Great Recession, “Real estate market fundamentals and values will fare much better compared to that era.”
Maher is the former director of strategy at La Salle Investment Management, and an analyst for the Urban Land Institute.
Maher added that while the nation’s real estate industry may feel some relief due to future market indications, “the severity of the current economic downturn and the many unknowns of a global pandemic should temper our views and expectations.”
By Garry Boulard
Get stories like these right to your inbox. Sign up for our newsletter