PGIM Real Estate forecasts the next year for North America’s real estate markets

In the face of falling property values, property incomes have generally remained resilient in the U.S. real estate sector. In its recent 2024 Americas real estate outlook report, PGIM Real Estate says it expects property values to broadly continue their decline by another 10 percent and that rent growth will decelerate, though will stay positive.

“Usually when we have valuation declines, it's because the property incomes are going down or there's concern that they will,” said Lee Menifee, head of Americas investment research, PGIM Real Estate, in an interview with IREI. “So, we're navigating an environment where we're having to manage through these valuation declines at the same time that the property income growth is generally, on net, positive. … And I think it's the key to why it is taking so long for values to hit bottom, because you don't have the normal signals that help you expect values to go down, when your property incomes go down.”

PGIM Real Estate