Real Estate Economists Remain Positive on U.S. Economy and CRE Industry
By William Maher
Real estate economists continue to have a generally bullish outlook for the U.S. economy, capital markets, and real estate fundamentals. Overall, expectations have improved since the prior forecast in March 2018, and the strong second-quarter gross domestic product (GDP) growth rate of 4.2 percent was fresh in forecasters’ minds as they weighed in on future years. Based on this forecast, the U.S. economy will easily surpass the current record for length of expansion (120 months) in mid-2019. Consistent with a strong economy, key real estate metrics—such as NCREIF Property Index (NPI) returns and transaction volumes—moved moderately higher in this survey. While expectations have improved, the survey was completed prior to recently announced tariffs by the United States and China that could curtail growth in 2019 and possibly beyond. While there are many potential outcomes for the current trade dispute, escalated tariffs with China could dampen the next round of forecasts in April 2019.
These results are based on the semiannual ULI Real Estate Economic Forecast, prepared by the ULI Center for Capital Markets and Real Estate, which will be discussed during a webinar and released later this week. The survey was completed in September 2018 by 45 economists/analysts at 33 leading real estate organizations.