The Institute of Real Estate Management (IREM), whose primary focus is on the “multi-family and commercial real estate sectors”, held an “economic-forecasting event” on Friday, which both a P-I reporter and Matt at Urbnlivn wrote up reports on.
Here’s an excerpt from the P-I’s story: Real estate a sore point in Seattle area economy
“When we look at Seattle’s commercial real estate outlook — duh, it’s deteriorating,” leadoff speaker David Legeay, a KeyBank senior vice president, told 500 real estate professionals and investors at the 23rd annual economic-forecasting event by The Institute of Real Estate Management. It was held at the West Club Lounge at Qwest Field.
“I think you can expect to see a continuing, steepening decline in opportunities here in Seattle over the coming months. You’re going to take your lumps just like everyone else has,” the Cleveland resident said.
Legeay said the Pacific Northwest market has held up significantly better than others in the U.S. through 2008. But, he noted, construction has been the single largest contributor to employment growth in Seattle, “and we think there is some risk, given the high reliance on construction, administrative and information-type services,” he said.
Even J. Lennox Scott is finally starting to slightly tone down his “we’ll never drop here” language (emphasis mine):
J. Lennox Scott, chairman and chief executive of John L. Scott Real Estate, predicted that residential real estate’s comeback will be led by first-time home buyers, close to downtown. Cheaper gasoline, interest rates that may decline to 4.5 percent and a small inventory of appropriate houses will fuel a surge in that segment, Scott said. But he didn’t predict when it will occur.
That’s not the projections that we’re seeing. We’re in one of the best markets in the nation here in the Northwest. We have positive job growth, we have low interest rates… And we just do not see that taking place.
Fact: King County’s SFH median price has fallen 18% from the July 2007 peak of $481,000 to $395,000 in November. That’s only 16 months, for those of you keeping score at home. So much for “positive job growth” and “low interest rates” saving Seattle, Mr. Scott.
Be sure to also check out Matt Goyer’s write-up of the breakfast over at Urbnlivn. Here are a few excerpts:
My take away from David Legeay’s (SVP at Key bank) keynote was that while things nationwide may be in the final stages of bottoming Seattle is currently not so bad relative to other areas but things will get worse as a large part of our local GDP has been made up of construction and real estate both of which are in or moving into an oversupply condition in residential, multi-family and commercial (though not industrial.)
…Matthew Gardner felt we’d have a V shape recovery as we aren’t that over built relative to other markets…
The collective outlook for 2009 was not positive; instead wait for the opportunities to arise late in 2009 before getting back in.
Again, since IREM focuses on multi-family and commercial real estate, it’s not really clear how many of these predictions are meant to apply to those markets as opposed to the residential real estate market, but it’s interesting to see how the tone has turned nonetheless.