Global Industry Overview: Real Estate
The real estate industry encompasses a broad range of businesses involved in the development, transfer, and management of real property. Major segments include developers, property managers, and real estate agents and brokers. For discussion of new building construction, see also Construction, Residential Building and Construction, Nonresidential Building.
Historically, real estate has been a cyclical industry in which property values often mirror the fluctuations and conditions of national and global economies. The U.S. economy suffered downturns in both the early 2000s and the late 2000s, and a similar lack of verve held back the real estate market in many other parts of the world, including Latin America and much of the European Union, hitting Germany particularly hard. Certain sectors of the industry performed well, however. In Europe, for example, retail-related real estate transactions flourished. In the wake of the 2001 recession, real estate continued to be the one bright spot in the U.S. economy, as historically low interest rates led to record home sales in 2002 and 2003. Investors were also lured to real estate in greater numbers, as the stock market continued to give unimpressive returns throughout the early 2000s. The appearance of real estate investment trusts (REITs) in many markets showed their appeal to investors who could now purchase this type of investment through public exchanges. The real estate bubble began to collapse in 2006, especially in the residential sector. As of 2010, the industry had still not recovered, although the resulting recession had technically ended in 2009.