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After last week’s Machinists vote that raises serious doubt about whether the 777X will be built here, we needed some good tidings. And they are here, in the new Emerging Trends in Real Estate from the Urban Land Institute and PricewaterhouseCoopers.

Among the 51 markets to watch in 2014, Seattle comes in at No. 6, up one notch from last year.

For 35 years, Emerging Trends has been the gold standard of where the real-estate market is headed. It is based on interviews and surveys with more than 1,000 developers, investors, lenders, builders and real-estate service firms. So this is not just another one of the ubiquitous lists out there.

Our strength is widespread in investment, development and homebuilding. All have shown improvement from the previous survey. Homebuilding showed the largest gain.

A national real-estate consultant said, “ Seattle is enjoying good job growth due to the tech industry. It is also becoming a core market for foreign investors.”

We get credit for a well-educated population, as well as for our global connections. High-tech sectors are hiring and are expected to keep our incomes higher than the national average.

However, there is also this compliment, which takes on a cautionary backbeat in the wake of the Machinists vote: “Seattle-Bellevue-Everett’s near-term fortunes are more upbeat than most because the expansion in commercial-aerospace manufacturing will stretch into 2014.”

True enough, into 2014.

Household growth in the metro area is projected at 5 percent over the next three years. Median house prices are projected to rise 4.4 percent from 2013 to 2014.

Survey respondents gave the Seattle area high marks beyond the multifamily development that has thrived in the aftermath of the Great Recession.

Office, industrial and distribution properties rank in the top five markets.

Hotels don’t fare as well. Here, respondents gave a “sell” recommendation that was above average.

If there’s worry about overbuilding, respondents didn’t seem to share it.

The big picture is that the overall real-estate industry is finally recovering from the great crash. More real-estate sectors are inviting to institutional investors. And any rise in interest rates is expected to be moderate.

Federal Reserve data show housing starts digging out of the deep hole caused by the recession. Delinquency rates on commercial real-estate loans are down sharply. Lending is easing up.

According to the Mortgage Bankers Association, residential foreclosure and delinquency rates have improved to their best levels in five years.

CoreLogic’s index of house prices nationally showed a 12 percent increase in September compared with the same month in 2012.

Closer to home, data from the Runstad Center for Real Estate Studies at the University of Washington show an 8.4 percent rise in house resale prices statewide in the third quarter. In King County, it was 15.3 percent.

Some of the improvements can be traced to the continued bond-buying program and low interest rates from the Federal Reserve. But it is also a sign that sectors of the market are coming back from bottom as bad bets are worked out.

It is happening despite continued high unemployment, loss of median household income and federal government austerity.

But the gains are uneven.

Some sprawling Sun Belt metros that are heavily dependent on building single-family houses aren’t expected to perform well in 2014.

For example, Phoenix comes in at No. 25 and Las Vegas at No. 38.

The hottest markets are almost all cities with strong tech or energy sectors. The exception is Miami, No. 8, with its strong investor base from Latin America.

The top five are San Francisco, Houston, San Jose, Calif., New York City and Dallas-Fort Worth. Portland ranks 19th. Energy centers also play a leading role in Canada’s outlook, with Calgary and Edmonton No. 1 and 2, respectively. Vancouver ranks No. 4.

Seattle’s neighborhoods, urban quality, diversity and hip quotient, also help the city in a significant demographic wave identified by the Emerging Trends report.

“Generation Y — those people born between 1979 and 1995 — is an urban and urbane generation. There are 72 million gen Yers in the United States — approaching the size of the baby-boom generation of 73 million — and, through immigration, gen Y is growing.

“This generation is the most ethnically and racially diverse of all the generations and stands out as the most urban, multicultural, and transient generation in America today.”

And the members prefer to live in big or medium-sized cities.

The report notes that this generation will be “more urban and less suburban.”

All sectors will be affected, including commercial.

“This group lives, works and plays in different ways than previous generations.”

Think the live-work-play district of South Lake Union and nearby neighborhoods.

A city such as Phoenix, although the nation’s sixth-most populous, offers nothing that can compete.

To be fair, this is also a generation saddled with high student debt and lower wages than baby boomers. But the slice of high-paid, high-talent young people are choosing places such as Seattle.

We learned in the last recession not to depend too heavily on real estate, particularly when it was sliced and diced as rackets on Wall Street.

But it remains a critical part of the economy. And Seattle is going strong.

San Francisco ranked No. 1 overall for the second consecutive year in the Urban Land Institute’s annual real estate report, which evaluates future prospects for investment, development and homebuilding sectors. Seattle ranked 6th overall. The numbers in parentheses show the rank for each city in each of the three categories surveyed.
City Investment Development Homebuilding
1. San Francisco (2/1/1) 6.98 6.88 7.74
2. Houston (1/3/2) 7.00 6.64 7.48
3. San Jose (5/2/3) 6.78 6.75 7.40
4. New York City (3/4/6) 6.84 6.58 7.19
5.Dallas-Ft. Worth (6/6/4) 6.76 6.37 7.36
6. Seattle (4/7/7) 6.83 6.36 7.19
7. Austin (7/10/5) 6.69 6.25 7.34
8. Miami (10/5/8) 6.57 6.38 7.06
9. Boston (8/8/9) 6.64 6.35 6.87
10. Orange Co. (9/12/10) 6.60 6.17 6.85
11. Denver (13/14/11) 6.46 6.15 6.84
12. Nashville (14/11/15) 6.46 6.18 6.75
13.Los Angeles (15/13/17) 6.45 6.15 6.70
14.San Antonio (19/16/12) 6.28 6.10 6.79
15. San Diego (12/19/16) 6.47 5.91 6.71
Source: Urban Land Institute

You may reach Jon Talton at