Expectations & Market Realities in Real Estate 2019

Expectations & Market Realities in Real Estate 2019 Uncharted Territory
\Dear Readers, Investors are traveling into uncharted territory as the US economy’s expansion surpasses its 10-year anniversary in July 2019, which would break the record for the longest economic expansion
since the government started collecting records in the 1850s. Unemployment fell below 4% – which would have been almost unthinkable a decade ago – without sparking inflation to rise much above 2%. While it is certainly good news that the economy has been growing
for a decade in the wake of the worst downturn since the Great Depression, many fear that another downturn could be on the horizon. Investors are worried because they know nothing good lasts forever, and they see potential disruption in the economy – perhaps
caused by political turmoil around the world, the potential for continued raising of interest rates, or uncertainty caused by global trade discussions. In 2018, the stock market rode a roller coaster and ended down for the year. So we enter 2019 asking the
question: What will the year bring for the US and global economies and the commercial real estate (CRE) market? The good news for CRE investors is that solid property fundamentals are underlying strong valuations and these valuations are supporting high prices.
All the property types seem to be holding their own — including retail — which has struggled in recent years due to overbuilding and the rise in e-commerce. Surviving retailers are learning how to adapt to new technology and changes in consumer shopping tastes.
As more consumers make online purchases, the need for distribution centers increases and demand for industrial space keeps growing. The apartment sector exhibits renewed strength, thanks — in part — to a continuing problem with affordability for single-family
housing. In the hotel sector, room supply, room demand, occupancy, average daily rate (ADR) and revenue per available room (RevPAR) are at all-time highs. The office sector has been spurred by increased investment in non-major and suburban markets. We expect
continued volatility in the financial markets, along with a slow but steady rise in interest rates and Treasury rates. Debt and equity capital should continue to be readily available. We expect that equity capital will be more disciplined. For this report,
Situs RERC, Deloitte and the NATIONAL ASSOCIATION OF REALTORS® are once again pleased to provide you with our outlook into the commercial real estate market, the economy, the capital markets and the property markets and to provide our collective perspectives
for 2019. We would like to extend our gratitude to all who contributed to this report. This includes the data providers, survey respondents, economists, researchers and analysts, and reviewers and business colleagues, without whom this report would not have
been possible. We also would like to thank our clients, subscribers and consultants for their continued support of this annual publication.

https://www.nar.realtor/sites/default/files/documents/2019-expectations-and-market-realities-in-real-estate-02-05-2019.pdf

 
Thanks!
Curtis D. Harris, BS, CGREA, REB
Associate Degree in Architecture, LACC
Bachelor of Science in Real Estate, CSULA
State Certified General Appraiser
Real Estate Broker
ASTM E-2018 Commercial Real Estate Inspector
HUD 203k Consultant
HUD/FHA Real Estate Appraiser/Reviewer
FannieMae REO Consultant
CTAC LEED-GREEN Certificate

The Harris Company, Forensic Appraisers and Real Estate Consultants
*PIRS/Harris Company and the Science of Real Estate-Partners Since 1984*
630 North Sepulveda Boulevard, Suite 9A
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310-337-1973 Office

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