Outlook: What's in store for 2010?
Urban Land Institute Los Angeles
By Bruce Beck
...While the debate rages on regarding whether the current real estate downturn eclipsed the crisis experienced in the early 1990s, most believe that the worst of the current downturn is behind us. That does not, however, mean that there will still be painful times ahead as many believe a full recovery will not be seen until as late as 2012.
"While the root causes of the current recession differs significantly from that of the 1990s, the way out will be similar as assets transfer from weak to strong hands," said Stan Ross, Chairman of the Board of the USC Lusk Center for Real Estate and a Distinguished Fellow. "More than a million companies filed bankruptcy and those assets need to be moved. We are also beginning to see lenders dispose of real estate owned and bad loans sparking needed transaction activity. This should get sidelined capital back into the game."
Ross's predictions are supported by the recently released Emerging Trends in Real Estate 2010, a trends and forecast publication of the Urban Land Institute and PriceWaterhouseCoopers. Based on interviews and surveys from more than 900 key real estate leaders, the report states that 2010 will be marked by underwater borrowers walking away from or selling assets at big losses and banks finally starting to clear out bad loan portfolios. Ross believes that the market will begin to stabilize sometime in the third or fourth quarter...