OAKLAND, Calif. - Respondents to a real estate outlook survey
expect to be more active in investments in the Southwest in the next
Respondents in the survey - Real Estate 90: The Next Five Years
- said they would be less active in the Northeast. The survey by
Ernst & Young Real Estate Advisory Services of Oakland included 400
executives in the real estate industry and several real estate
The survey said that 24 percent of the respondents projected an
increase in investment activity in the Southwest in 1990 and 1991
compared to 1989. That was the third highest among the seven
regions in the survey.
The only regions higher than the Southwest were the Midwest with
28.4 percent of the respondents projecting an increase in investment
activity and California with 25.9 percent.
The lowest was for the Northeast, where only 17.3 percent
projected an increase in real estate investment.
"Perhaps the most surprising result of the survey was the fact
that the Southwest is coming back so quickly," Ernst & Young said in
an analysis of the survey. "The Southwest is the only area of the
country to go full cycle from boom to bust and back again.
"Many survey respondents indicated that their interest would be
focused entirely on the Southwest."
Dallas and Houston were singled out by survey participants as
the markets with the most potential during the first half of the
1990s, followed by Los Angeles and Houston.
Dallas and Houston were ranked among the top 10 national markets
for each property type in the survey. The property types in the
survey were downtown office, suburban office, warehouse and
No other market in the Southwest, which included Oklahoma City,
Austin, Phoenix and San Antonio, ranked in the top 20 for any
Past overbuilding was identified by 89.2 percent of the survey
participants as the single factor that would affect nationwide real
estate performance most in the first half of the 1990s.
"Optimism does not prevail within today's real estate industry,"
Ernst & Young said in an analysis of the survey. "After six years of
rapidly escalating prices and despite widespread softness in rents,
we are entering a real estate recession.
"Prices will begin to soften as foreign capital diminishes and
no longer creates the high demand and high prices we have
experienced in the period of 1983-1989. …