Thread: 2008 Real Estate Trends Exposed

2008 Real Estate Trends Exposed in IRR-Viewpoint Report from Integra Realty



Integra Realty Resources, Inc. today released the 2008
IRR-Viewpoint, the industry's annual compendium of real estate
valuation, trends, and forecasts. This year's report provides thorough
data on local and national market conditions for seven industry
sectors, including multifamily, office, retail, and industrial
properties.

The report also provides coverage of new investment criteria; fair
value and cost segregation issues; demographic and economic trends
affecting the national real estate market; and projections for
lodging, gaming, and the Mexican market. Key findings of this year's
IRR-Viewpoint include:

-- Multifamily apartment housing has the most potential for
expansion in the coming year, as first-time homebuyers who
can't afford adjustable rate mortgages return to the rental
pool. While the number of apartment units in the pipeline has
increased significantly in 2007, vacancies are decreasing, and
many market rents will continue to rise above 3 percent
annually. The top apartment markets nationwide are Hartford,
Conn., Providence, R.I., Coastal N.J., Orange County, Calif.,
and New York City, with an average vacancy rate of 2.94
percent.

-- Office CBD properties in Charlotte, N.C., Providence, R.I.,
Las Vegas, Nev., New York City, and Washington D.C. remain
strong, with low vacancies. The combined vacancy rate for
these five markets is 6.82 percent, as compared to an average
of 11.1 percent across all markets surveyed. Development in
the CBD pipeline for 2007-2010 is 88 million square feet,
approximately 18 million square feet higher than last year's
projection. In contrast, the suburban office development
pipeline has dropped from 242 million square feet to 179
million.

-- In retail, 71 percent of markets are experiencing expansion,
led by San Jose, Orange County and Los Angeles, Calif. Many
developers, however, are reporting a decline in the tenant
pipeline, as national retailers are increasingly cautious
about site selection and the number of new stores opened.

-- The majority of the industrial market remains steady in either
the recovery or expansion phase. Top markets include Los
Angeles and Orange County, Calif., Sarasota, Fla., and San
Francisco. One trend to watch: the development of intermodal
facilities--where shipping containers are transferred between
rail and truck. Container shipments have increased 37 percent
in the last five years, and now represent the largest revenue
source for railroads. This trend is expected to continue as
manufacturing of consumer goods continues to shift to Asia.

-- The aging baby boomer population and the rise in the Hispanic
population are two trends driving a national shift to southern
and western regions. Affluent boomers are retiring to more
temperate climates in the South and West, such as Riverside,
Calif., Las Vegas, and Phoenix, Ariz. Spanish-speaking
communities are growing fastest in the South and West regions
of the United States too, with half of all Hispanics residing
in California and Texas.

The overall US housing market is slowing down. One sector that hasn't been impacted is the fractional real estate ownership. It has seen a steady increase during last year and this trend will continue as there are more options. The fractional market is still very young. As it becomes mature, there will be more awareness, more publicity and more interest.

Another trend worth mentioning is the shifting from the US real estate market to European market, which has remained strong. Same is true to overeas fractional ownership markets.