Economist Hugh Kelly’s 2013 Scorecard


Almost every year for the past 16 years, I have attended the CREW Miami’s (Commercial Real Estate Women) Economic Forecast presented by Hugh Kelly, PhD.  He is the 2014 Chair of the Counselors of Real Estate, a very elite invitation-only group of 1,100 economists from across the world.  Hugh has been a professor at NYU’s Masters Degree Program in Real Estate Investment & Development for over 26 years.  In other words, this man knows his numbers.  I always enjoy Hugh because he’s practical and understandable – how often do you find that in an economist?

Last year Hugh made the following 2013 predictions.  You can click here for the full post I wrote on that event.   I’ve added in the actual numbers in bold and italics.

  • 2.16 million jobs will be created in 2013 – 2.186 million jobs created
  • Unemployment will drop to 6.9% – 6.7% national average
  • 10 Year Treasuries will be at 2.25% by December 31, 2013 – he missed this one.  10-Year Treasuries are at 2.9%.
  • The U.S. will have 950,000 new housing starts in 2013 – by November, housing starts were at 918,000.
  • The U.S. will have 5.15 million home sales in 2013 with prices increasing 10% – as of November, we were at 5.073 million.
  • Commercial real estate sales volume will increase 16% with sales of $300 billion. By November, we were already at $305 billion.
  • The Dow Jones Industrial Average will be up 7% to 14,100 by year end. – Hugh was sandbagging on this one because we hit that by  February.

Here are Hugh’s 2014 predictions.  Let’s see how he does over the next 12 months:

  • 2.5 million jobs will be created in 2013
  • 10 Year Treasuries will increase to 3.5% – 3.75%, about a 50 basis point increase.  He has confidence that our new Fed Chair, Janet Yellen, will “manage gracefully”, as he so eloquently put it.
  • Nationally there will be 1.25 million housing starts.  Keep in mind that the norm is 1.7 million, so we still aren’t back to normal levels.
  • The U.S. will have 5.4 million home sales in 2014.
  • Commercial real estate sales volume will increase another $30-$45 billion in 2014, which would put us somewhere around $350 billion by 2014 year-end.
  • The Dow Jones Industrial Average will be at 17,400 by year end.

Stay tuned for an upcoming blog for Hugh’s Top 5 Issues for Commercial Real Estate as determined by the Counselors of Real Estate.   I’ll also be writing about Costar’s recent webinar on the Office Market:  2013 Results and 2014 Forecast.  It must be January – everyone has their crystal balls out and working on their forecasts.


About Author