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HOUSTON-Before a crowd of more than 1,000, Dr. Barton Smith, the region’s most formidable economist, predicts 30,000 jobs will come to town next year. In line with the good news, he is “bullish” about all economic indicators that point Houston in the direction of a recovery by 2004.

The bi-annual symposium by the University of Houston’s Institute for Regional Forecasting, held at the Radisson Astrodome Hotel, offered a rosy outlook for commercial real estate from an investment and occupancy standpoint. Part of the optimism is tied to the return of investors who left town in the 1980s. They are back with their capital as they seek stable returns in a familiar environment and a guaranteed safe resting ground from the beleaguered stock market.

Smith, an economics professor and the institute’s director, tells GlobeSt.com that commercial real estate and stock will be the primary make-up of a successful portfolio as long as the national economy doesn’t tailspin into a double dip recession. And that, he adds is highly unlikely.

Smith’s optimism for the investment arena carries over to the job front. He predicts that 30,000 jobs will be created in 2003, with continued growth over the next six years. As jobs increase, office vacancies will decline. He says the city’s future growth will be fueled by a diversified economy, one no longer energy reliant.

Smith’s best news by far was reserved for the multifamily market. The occupancy decline, he says, is not due to a dwindling Houston population, but instead is tied to low interest mortgage rates. Interest rates inevitably will rise when the economy rebounds, at which time tens of thousands of buyers won’t be able to qualify for a mortgage, according to Smith. He estimates 55,000 households in Houston would not be eligible if long-term interest rates return to 7% and that peaks to 100,000 if the rates spike to 8%.

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