2024 Real Estate Market Forecasts from Industry Thought Leaders and Analysts
LaSalle Investment Management believes a meaningful recovery in transaction volume is not likely to occur in the first half of 2024, but activity may pick up in the second half. They see potential for the interest rate environment to become more favorable, but caution investors on relying upon a decline in rates. They expect supply will weigh on real estate fundamentals in 2024. Vacancy will likely climb, and rents should fall nationally for US apartments and in several industrial markets.
CBRE forecasts that the hotel industry will face headwinds to RevPAR growth in 2024, including competition from alternative lodging sources and a slower economy, but fewer Americans traveling internationally will benefit the domestic market.
Beacon Economics forecasts slower growth for 2024 than the previous year, but doesn’t expect to see a recession. They see strength in the Sacramento commercial real estate (CRE) market, with every major CRE segment experiencing a decline in vacancy rates, except for unchanged apartment properties’ vacancy rate. On a quarterly basis, Beacon Economics expects the demand for housing to continue and California home prices to surpass their pandemic peak by the midpoint of 2024.
Hines Global CIO on Real Estate Transactions
CBRE forecasts that the overall office vacancy rate will peak at 19.8% by year-end as below-average leasing activity persists and new construction deliveries continue to come to market, albeit at a slower pace.
CBRE expects the retail availability rate to fall by 20 basis points and end the year at 4.6%. They forecast that asking rent growth will dip below 2% for the first three quarters of 2024 but rise above 2% in Q4.
CBRE expects the U.S. industrial market to stabilize in 2024, with net absorption on par with 2023 levels and taking rent growth moderating to 8%.
National Association of Realtors is projecting that for residential real estate, existing-home sales will rise 13.5% and new-home sales—which are up about 5% this year, defying market trends—could increase another 19% by the end of next year.
CBRE forecasts that with the delivery of 440,000 new multifamily units expected in 2024 and more than 900,000 currently under construction, the overall multifamily vacancy rate will rise and rent growth will decelerate.
Fannie Mae expects rent growth to be in the range of just 1.0% to 1.5% in 2024, while the national multifamily vacancy rate rises to 6.25%.
The National Apartment Association expects rental housing to experience slow, steady growth in 2024, buoyed by its relative affordability compared to the for-sale housing market and a resilient, if diluted, labor market.
The multitude of market perspectives for 2024 can easily become overwhelming. Verifying both the reliability of an individual source and the validity of their predictions requires time-consuming research as well as in-depth knowledge of prior performance and market trends.
Instead of reading through every forecast report, save yourself the trouble and give Legacy a call. Our knowledgeable team is here to break down the industry forecasts and help you navigate the current market trends.
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This is for informational purposes only, does not constitute individual investment advice, and should not be relied upon as tax or legal advice. Please consult the appropriate professional regarding your individual circumstance.
The data contained in this material was obtained from third-party sources believed to be reliable; however, Legacy Investment Real Estate, LLC. and Concorde Investment Services, Inc. (CIS) does not guarantee the accuracy of the information.
Statements concerning financial market trends are based on current market conditions, which will fluctuate.
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