Forecast Upbeat on Housing Recovery

Urban Land Institute

The housing market may finally be on the path to a sustainable recovery, according to a new report, but it’s not the cork-popping celebration many under-water homeowners may have hoped for.

The Urban Land Institute, a nonprofit land-use think tank, released on Wednesday its real-estate forecast for the next three years, which shows some encouraging trends in both the residential and commercial sectors through 2014.

The survey, which compiled the opinions of 38 real-estate economists and analysts, many of whom are members of ULI, reflects the panel’s median forecast on 26 economic indicators dating back to 2009. Projections are based on data from 2009 to 2011.

Most heartening for builders, the panel predicts that single-family housing starts will jump by 2014, from 428,600 in 2011 to a projected 800,000 in 2014. As demand improves, home prices may rise as soon as 2013 and prices could tick up by 3.5% after the third year.

Despite the run-up on construction during the housing boom, “we’ve actually under-produced” in the last decade, said Peter Linneman, chief executive of the American Land Fund and a respondent in the survey, during a conference call.

One caveat, Mr. Linneman said, is local shadow inventory of homes in delinquency or foreclosure that may come back on the market. “We stopped having a national housing story a year ago,” he said, with hard-hit markets like Las Vegas and parts of South Florida likely to trail behind healthier metros for years to come.

But it’s important also to keep in mind that the recovery, when it does take hold, will likely have little resemblance to the explosive growth seen through 2005, Mr. Linneman said. “We could have a substantial recovery,” he said, and still be below peak levels, easily.

Other respondents had reservations of their own. “It’s too optimistic,” Kenneth Rosen, chairman of the California-based Rosen Consulting Group, told Developments. He remains unconvinced that single-family housing starts will nearly double by 2014. It’s a very aggressive forecast, he said, and the upcoming election could seriously hobble the market’s momentum, especially if investors have reason to fear a rise in capital gains taxes in 2013.

Fatal error: Uncaught Exception: 12: REST API is deprecated for versions v2.1 and higher (12) thrown in /home4/jdvc/public_html/wp-content/plugins/seo-facebook-comments/facebook/base_facebook.php on line 1273