Despite Sluggish Economy, Real Estate Professionals Stay Positive
Real estate professionals pessimistic much? According to Grant Thornton LLP's 2008 Real Estate Survey, 57 percent of real estate executives, or six out of 10, have a negative outlook regarding the U.S. economy for 2009, and roughly half of respondents feel the same about the real estate industry's business outlook. These are dramatic decreases in optimism from 2006, where only 15 percent of those surveyed had a negative outlook on the economy for the year to come and 5 percent pessimistic about the real estate industry's outlook.
Despite the negative outlook toward the nation's economy, half of 2008's respondents expressed an optimistic outlook for their own companies in the coming year—compared to 2006 when 80 percent of those surveyed had a positive outlook for their own companies in the coming year.
The latest concern plauging the minds of roughly 36 percent of real estate executives.: the national economy. Earnings and operations results (21 percent), the ability to access capital (19 percent), tenant relationships (10 percent), and rising costs (5 percent), were among the other top five concerns.
Other key findings in the survey:
- 69 percent think the unemployment rates in their market will increase.
- 61 percent predict vacancy rates will rise in their market.
- 79 percent expect capitalizations rates to increase nationally.
- 76 percent believe the capitalization rates will increase in their market.
- 51 percent think interest rates will decrease.Jacqueline Gilbert
