Home Sweet Home
March 1, 2005
When it comes to pulse-taking, the Washington, D.C.–based Urban Land
Institute does an exhaustive job of publishing an annual Emerging Trends in Real
Estate report that includes prognostications culled from in-depth interviews
with hundreds of economists, money managers, real estate consultants and
investors from around the country. “It’s not particularly sexy and it sounds
boring, but when more than 500 people respond to your survey and you interview
150 of them at length, you can extract a consensus that generally tends to
come true,” says Peter Korpacz, who directs the global strategic research group
for PriceWaterhouseCoopers and is one of the principal researchers of the
institute’s 2005 report. Among the report’s predictions:
• Real estate, in general, will outperform stocks in 2005, and
residential real estate has the best investment potential, ahead of domestic
stocks as well as commercial
real estate.
• Some areas in the
Sunbelt will face potential growth slowdowns as traffic and sprawl reduce their
desirability.
• Real estate investing will become even more clustered in
the coastal markets, especially Southern California and South Florida. Indeed,
of the 20 metropolitan areas with the highest rates of annual real estate value
growth in 2004, 11 were in California and four in Florida.
Based on the Urban
Land Institute’s survey and the projections of other real estate experts, the
list of the top real estate markets to watch this year shapes up like this:
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