SAN DIEGO—The Urban Land Institute’s (ULI) latest Real Estate Economic Forecast projected full employment recovery and growth by the end of 2022 in the U.S. and strong GDP growth continuing at rates comparable to the pre-pandemic decade by 2024.
The semiannual survey of American real estate economists and analysts addressed 27 economic and real estate indicators, ranging from GDP and employment to commercial real estate transactions and property sector performance.
The Spring 2022 ULI Real Estate Economic Forecast semiannual survey was completed from March 24 to April 13.
Commercial real estate transaction volume reached a historic high of US$846 billion in 2021, almost double the pandemic-year low of $431 billion in 2020. Levels are expected to moderate during the forecast period but still exceed pre-pandemic highs, with $800 billion in 2022, $725 billion in 2023 and $750 billion in 2024.
Price growth increased by 19.5 per cent in 2021, almost triple the price growth in each of the five previous years. Price growth in 2022 is expected to moderate to be a strong 10 per cent, before moderating further to 6.0 per cent in 2023 and 5.9 per cent in 2024.
Change in vacancy and availability rates is expected to be minimal in the forecast period across property types. Industrial availability will remain low and essentially plateau, apartment vacancies will remain tight and only inch up, and retail vacancies will remain steady at slightly below their long-term average. Office vacancy rates are expected to stay elevated and plateau at above their long-term average.
“Looking at the Spring 2022 Forecast, we can anticipate post-pandemic growth will be rooted in strong regional markets and robust opportunities in the build-to-rent segment,” said ULI Global CEO Ed Walter in a statement. “The projections tell us that although the prospects of a recession have increased, the impact on real estate should be limited.”