Real Estate to Recover in 2011?

The bad economic news continues to pile on. Layoffs have been hitting architecture and landscape architecture firms all over the country for the past few months, particularly those that work on residential development. ASLA reports that firms have been staying busy, but over 70% of landscape architecture firms are not considering hiring this quarter. AIA predicts a downturn in non-residential construction toward the end of this year. While I remain optimistic that we will make it through these tough times, there is no denying that they are tough. I continue to hear many predications as to when real estate markets will recover. Unfortunately, most seem to be hopeful predictions versus realistic ones. I came across this article over the weekend reporting on recent economic predictions by Dr. Mark Dotzour, chief economist at the Real Estate Center at Texas A&M University and Dr. Rajeev Dhawan, director of the Business Economic Forecasting Center at Georgia State University, two highly respected national economist. They predict that real estate will begin to recover in late 2010 and rise markedly by 2011. This seemed to be more realistic. However, Dr. Dotzour was kind enough to offer a ray of hope for an earlier recovery saying:

Dotzour points out a source of hope for commercial real estate investors, who would certainly welcome an unexpectedly stronger economy next year. Due to the credit crunch and economic uncertainty associated with the presidential election, Dotzour believes a number of U.S. companies and consumers have put off major decisions to spend or commit to space this year.

By March 2009, he says, businesses will have a better understanding of their financial standing and tax burdens under the new president, and may cut loose with a swath of business deals, leases and real estate purchases. “It’s possible we could have a very pleasant surprise around April.”