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ULI Forecast: Economic Growth Expected from 2021-2022

A new forecast from the Washington D.C.-based Urban Land Institute predicts economic growth from 2021-2022, and less of a slump for the rest of this year than was previously expected six months ago. The report is based off a September-October survey of 43 economists and analysts at 37 leading real estate organizations.

ULI held a webinar to discuss the findings of the forecast on Oct. 28. Panelists included Richard Kleinman, managing director of research strategy at LaSalle Investment Management; Jeanette Rice, Americas head of multifamily research at CBRE; Tim Wang, managing director at Clarion Partners and Adam Ruggiero, managing director at MetLife Investment Management.

Predictions of the survey included:

  • U.S. GDP will decline by 5 percent in 2020, down from 2.2 percent in 2019.
  • Net job growth will drop by 9 million in 2020, a more upbeat assessment over the May projection (10 million jobs lost).
  • Real estate transaction volumes are expected to begin rising in 2021, though not near the levels seen at the end of 2019.
  • Commercial real estate price growth as measured by the Moody’s RCA Commercial Property Price Index (CPPI) is expected to drop by 2 percent in 2020 (up from a projected -7 percent in May).
  • National vacancy and availability rates are expected to be below the 20-year average for industrial and apartments, but above average for office and retail.
  • Rent growth expectation for the next three years is expected to stay either negative or middling, except for industrial which will remain robust.

“The fall survey provides generally good news about the U.S. economy and real estate markets, particularly compared with the spring survey,” said William Maher, principal at Maher Strategies. “The worst fears of earlier this year have mostly eased. Several survey respondents pointed out the inherent difficulty of forecasting given the many unknowns related to the coronavirus pandemic.”

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About David Cohen

David Cohen is Southeast Editorial Director at Connect Commercial Real Estate. David is a media veteran with more than 10 years of experience in journalism, copywriting and communications across a variety of roles. He is responsible for covering commercial real estate news and trends in the Southeast, Florida, Washington D.C. and Boston at Connect CRE as well as specializing in the Student Housing sector. Prior to joining Connect, David was the editor of Northeast Real Estate Business magazine and Student Housing Business magazine at France Media as well as spending time freelancing for ESPN and the Associated Press in the fast-paced field of live sports event production. He is also an owner and investor in multifamily real estate in Atlanta, GA. David currently resides in Atlanta and graduated from the College of Communication & Information at the University of Tennessee Knoxville.