The Urban Land Institute Real Estate Economic Forecast is one of the most respective forecasts in the industry.
Here are the highlights you need to know when considering buying, selling, or building a house:
- 3% GDP in 2018 - They expect to end the year with a GDP growth of 3%. They are projecting 2019 at 2.4% and 1.7% in 2020. This means that the economy is as robust as it will get, but it will stay respectable for a few years.
- Good job growth to 2020 - ULI forecasts an average 1.77 million new jobs each year until 2020. The long-term growth averages 1.15 million. Job growth will beat expectations at 2.4 million in 2018, but will drop to 1 million in 2020, primarily due to a labor shortage.
- Slowing real estate market - RE transactions will drop about 3% from 2017's number to $475 billion. They are forecasting $450 billion and $415 billion for 2019 and 2020, respectively. This market peaked in 2015 at $569 billion, but is well ahead of the long-term average of $313 billion.
- Commercial RE prices growing - ULI is projecting a 5% growth in CRE prices in 2018 and 6, 5, and 4 percent over the next 3 years.
- Apartments will stay stable - Vacancy and availability rates for apartments will remain on a steady increase. For the most part, there will be an increase from the current 4.8% to about 5% in 2020. Commercial vacancies will increase slightly as will office vacancies.
- Single-family house construction weak - ULI is expecting 900,000 units for 2018, 930,000 units in 2019, then back to 900,000 units in 2020, all below the long-term average of 1 million annual units.
The real estate market and the financials behind it will remain solid with little chance of a massive downturn or a huge bubble. This means that everything will probably remain nice and predictable for a few years for both buyers and sellers.