"Bullish" might be the best way to describe the outlook for the nation's real estate markets over the next few years, according to a new report just released by Hartford, Conn.-based Phoenix Realty Group.

The report, entitled United States Real Estate Outlook and Strategy, was prepared by Peter P. Kozel, Ph.D., Phoenix Realty's new director of research, senior vice president and chairman of the company's policy committee. Kozel holds degrees from the Massachusetts Institute of Technology (MIT), the Wharton School of the University of Pennsylvania (MBA) and Harvard University (BA).

Specifically the report states that the U.S. economy slowed in 1995, but should grow at a 2% to 3% annual clip through 1997. Employment should grow an average of two million jobs each year for the next two years, while regional economic growth should be the strongest in the Southeast, Southwest and Mountain States. Regional growth should be about average in the Midwest and below average in California and the Northeast.

The report concludes that economic and real estate supply/demand conditions will remain favorable over the next two years. As a result, the values of many apartment, office, industrial, hotel and selected retail properties will increase.

For a better glimpse into Kozel's property by property analysis, here are a few excerpts from the Phoenix Realty report:

* The fundamentals for real estate will be very good in 1996 ann addition, the investment demand for these assets will also be excellent. The traditional appetite for mortgage loans by the life insurance companies surged ahead in 1995, and the indications for the coming year show that it will be even greater in 1996. In addition, the development of the CMBS market is moving ahead. The Mortgage Bankers Association estimates that new CMBS securitizations will approach $20 billion in 1996. The emergence of an upward sloping yield curve that we are forecasting will encourage the creation of CMBS securities by conduits and bring more permanent capital and liquidity to this marketplace.

* Multifamily Properties -- The national vacancy rate will continue to decline for the rest of the decade. The favorable investment implications are clear. Investment capital will continue to be attracted to this property type for at least the next few years.

* Office Properties -- In 1995, the investment returns earned in the office sector were not as strong as those from apartments. Nevertheless, the outlook for this sector over the next three years is good. Generally, the market values of properties are still well below replacement costs, and the supply of new space will fall well below the incremental demand. Since there is more uniqueness associated with each individual property, submarket analysis becomes a very important element in the realization of superior investment returns.

* Retail Properties -- The continued rapid addition of "category killer" retail space in the "big box" format implies that competition within that sector and with the regional malls will continue. Until these sectors have more time to identify and eliminate the weaker tenants, the level of investment risk will remain quite high.

* Industrial Properties -- Our forecast anticipates that the vacancy rate will continue to provide both credit and investment opportunities. Also, ports that service trade with the Asian market should also offer excellent opportunities for investment in warehouse facilities.

* Hotel Properties -- One must be cautious about estimates of new supply that are based on historical data. As with the other property types, it is imperative that supply conditions are monitored very carefully.