Real estate industry leaders predict that the worst of COVID-driven real estate market declines sustained during the first six months this year may be in the rear view mirror, according to a midyear sentiment survey of industry leaders by RCLCO Real Estate Advisors.
While some sectors have not yet hit bottom, industry leaders surveyed by RCLCO predicted the beginnings of a recovery within a year.
Industry leaders predicted that family rental, adult and for-sale residential markets as well as land have already hit bottom, although resort and senior housing are still spiraling down, according to the survey.
As a result, within the next 12 months, homebuilders, subdivision developers and master-planned communities should be recovering and "stable," according to the survey.
Only 16 % believe that real estate markets will be "significantly" worse over the next 12 months, according to RCLCO.
Industry leaders also predicted that the hotel business will also recover within a year based on data that shows improving hotel occupancy rates and increases in passengers at TSA airport checkpoints, the survey said.
The retail sector remained in "full decline" in June with regional malls taking the biggest hit. But grocery-anchored neighborhood developments were viewed as "holding up well," the survey said.
The office space market was viewed as still in decline, according to a majority of those surveyed, although opinions varied as to whether it will recover within a year and how it may be impacted by the pandemic-imposed work-from-home trend.
The survey also reported that retail rent collections, while improving in June, remained under 60 %. Multifamily rental apartments were considered to be "holding up well so far," in part because of government relief programs that are soon set to expire.
The survey also highlighted one real estate sector boosted by the onset of the pandemic — the market for industrial space which surged because of an increased demand for big box warehouse, logistics, cold storage and "last-mile distribution" driven by an upsurge in home deliveries and e-commerce sales during the COVID-driven economic shutdown.
|Want to continue reading?
Become a Free ALM Digital Reader.
Once you are an ALM Digital Member, you’ll receive:
- Breaking commercial real estate news and analysis, on-site and via our newsletters and custom alerts
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical coverage of the property casualty insurance and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
Already have an account? Sign In Now
*May exclude premium content© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
R. Robin McDonald
Daily Report reporter R. Robin McDonald's journalism career includes stints as a staff writer at The Atlanta Journal-Constitution, The Fort Worth Star-Telegram, The Wichita Eagle, and The Anniston Star and as a trial tracker at CourtTV and CNN. She is the author of two true crime books -- Black Widow: The True Story of the Hilley Poisonings and Secrets Never Lie: The Death of Sara Tokars.
