Steady Market Gains Ahead

Steady Market Gains Ahead

Modest growth in the economy and an improving job picture bode well for both residential and commercial real estate.

For residential practitioners, NAR's forecast for 2013 looks like a return to normalcy, with healthy price appreciation, an increase in both existing- and new-home sales, and a drying up of the shadow inventory. Interest rates are expected to remain low, though inflation could put upward pressure on both rates and home prices.

For commercial practitioners, the rise in renter households is good news for the multifamily sector. Office, industrial, and retail are all expected to inch back, with slight declines in vacancies and positive growth in net absorption and rents. After years of tepid performance, both existing-home sales and new-home sales are expected to see significant gains this year and next, despite a gradual rise in interest rates. See rates....