Cautious Optimistism in Global Real Estate
November 12, 2012
“I’ll try not to be too gloomy, and I’ll try to find some silver lining,” said Adrian Cooper, CEO of Oxford Economics and one of the world’s leading financial minds. During the Global Forum Friday afternoon at the 2012 REALTORS® Conference & Expo, Cooper outlined his projections for the global economy and the implications for real estate.
While the global economy is still on what Cooper called “a roller coaster ride with no sign of let up,” the economic data for the U.S. shows a “bright future within reach.” Through 2014 and beyond, Cooper expects GDP growth to accelerate more than 3 percent annually, in part due to Federal Reserve measures like low interest rates that help increase supply and bring unemployment down. However, low rates and the deleveraging of bank debt have yet to significantly drive the U.S. economy forward. Cooper also pointed to America’s recent energy boom as being “a real game changer” in terms of U.S. competitiveness in the global marketplace.
The main takeaway from Cooper’s hour-long lecture was that as long as the Eurozone remains intact, positive economic growth in both the United States and emerging markets should underpin an improved outlook for real estate, and in particular, for housing prices. Should the European Union collapse, however, the prospects for housing prices would be significantly lower.
“You know there could be no greater early warning sign of impending break-up of the European union than the Nobel Peace Prize coming our way,” Cooper quipped.
Eurozone troubles aside, these positive prospects have led to improvements in consumer confidence and spending. As life springs back into the collective budgets of American households, housing prices in many areas are moving back up. Consequently, home sales, housing starts, and new-construction permits are projected to increase through 2013, Cooper said.
In light of these gains, Cooper remains hopeful but cautious. “We’re not expecting the housing market to suddenly start booming, but there is no longer a break in recovery,” he said.
—Melissa Kandel, REALTOR® Magazine
Updated: June 22, 2018