Ten Trends from ULI’s Business Barometer


The top ten trends in this month’s ULI Real Estate Business Barometer are:

  • Employment growth in March slowed dramatically; the unemployment rate inched down only because of a sharp decline in the workforce.
  • Total retail sales were up, though due, in large part, to a spike in gas prices. Inflation grew at its highest rate in almost four years due to the rise in energy prices. Consumer confidence dropped sharply.
  • Private construction value was up, almost entirely due to an increase in residential construction. The manufacturing sector expanded for the fourth-straight month; S&P 500 returns were strong.
  • Commercial property prices are at or near four-year highs, though still well below their prerecession peak, according to two repeat-sales indices. According to an index of REIT portfolio values, prices now surpass their prerecession peak. Cap rates remain low and stable.
  • Total commercial property transactions recovered from the prior month’s dramatic drop, as transactions in the apartment sectors vaulted. Transaction volumes in all other sectors declined.
  • CMBS issuance was down in March, but volume was still among the four highest monthly volumes in more than five years; all four of these months have occurred since November 2012. Spreads tightened a bit.
  • Total REIT returns were well above their long-term average and positive in all sectors, with the lodging/resort sector the strongest.
  • Multifamily permits have now been increasing fairly consistently for 3.5 years and starts for two years. Condominium sales volume was at a 5.5-year high and price increases were strong.
  • Single-family permits and starts continue their almost two-year steady climb, now reaching levels seen in 1982. Prices are just shy of all-time highs; sales fell.
  • Prices of existing single-family homes showed little change, according to repeat-sales indices, while prices of unpaired transactions increased slightly, but all are below prerecession highs; sales fell.

Overall, 65 percent of the key indicators in the Barometer have improved from the previous month’s Barometer; compared with a year ago, 87 percent have improved.

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