'cautiously optimistic' about real estate economy

The national economy is being held back by the slumping housing market, but change is within sight, according to one economic analyst.
"It's challenging, but … we are eventually going to come out of this thing," said Kevin Scherer, director for research and strategy at Blackrock Inc. — a New York-based investment management firm. "Very few people are talking about a double dip in our economy. I'm quite optimistic."
"It's challenging, but … we are eventually going to come out of this thing. Very few people are talking about a double dip in our economy. I'm quite optimistic." -Kevin Scherer

Speaking Wednesday before an audience of about 200 real estate professionals at the Mid-Year Economic Real Estate Symposium at the Grand America Hotel in downtown Salt Lake City, Scherer said the real estate market has some difficulties to work through, but those issues will be worked out in due time.
Particularly affected is the residential and commercial markets, he noted. The housing market may be the sector that lags behind and prevents a quicker comeback, he said.
"Housing market prices are still falling nationally, mostly working through all the foreclosures," Scherer said. That trend is expected to continue through the remainder of 2011, he added.
He said that the affordability of housing is "at an all-time high," which should eventually bode well for the market in the not-so-distant future.
Fortunately for Utah, the Beehive State boasts a stronger-than-average economy, Scherer said. That strength will help the state as it moves forward during the economic recovery.
Nationally, he said the commercial market will likely begin to improve toward the end of the year, with up to $200 billion in projects completed nationwide.

Overall, he said real estate across the country and in Utah is "fairly priced" in the current market.
"Over the next five or so years … earnings will grow a solid 20 percent (over that time)," Scherer said. Various other real estate sectors will also see growth, including office, industrial, retail and multifamily, he said.

"We are still cautiously optimistic that we are going to go into a modest recovery," Scherer said.



Note by By Jasen Lee