Real estate hits the sweet spot
The U.S. real estate market is entering a sweet spot in its current cycle that could last for the next several years, and risk levels remain generally low, according to a recent report from MetLife Real Estate Investors. The firm estimates the U.S. economy will expand by 2.6 percent this year, producing solid job growth and buoying consumer confidence and spending. The report notes most property markets in 2015 will see demand that is greater than supply, which will help fuel net operating income growth of between 4 percent and 6 percent, as rents continue to grow and leases signed at the bottom of the market roll to higher market rates.
“We believe that the U.S. real estate market is entering a sweet spot that could last for the next several years, given the momentum seen in the economy and real estate markets. Demand should continue to outpace supply across most property types in 2015, leading to a continued fall in vacancy rates and rising rents,” says Meli