It may be hard to avoid election coverage these days, but what do we know about how it will affect the CRE world? As part of our initiative to be up-to-date on the latest news, we've gleaned the internet for what impact the 2016 presidential election findings have on Commercial Real Estate.
Excess Supply: As the economy continues to recover from the recession, we are beginning to see an excess in multifamily housing. According to a study by National Real Estate Investor, the average apartment rent in the US increased 4.7 percent in 2015. However with the looming election, rents are expected to grow at a slower rate going forward due to over-saturation. Uncertainty Leads to Slower Development: Data shows us that predicable elections equal more confident consumers, which in-turn creates a healthier economy. There have been many words used to describe this election, but "predictable" has never been one of them. In such a vulnerable economy, companies are becoming increasingly worried and hesitant to make development-related decisions. Statistics Aren't Necessarily Gospel: We can't account for unforeseen events that could alter the outcome of this election. While markets do experience general ebbs and flows, a natural disaster could move markets and the election in even more unpredictable ways. We Could See a "Relief Rally": There may be value in the unpredictability of this election. For instance, if we compensate for negative news that doesn't come to fruition, we may experience a Relief Rally after the election. During this period, market prices will increase as a result of poor economic data, corporate earnings or political outcomes that were "priced into" the market. No Matter the Election Outcome, Certain Trends will Always Create Opportunities: With the increase in technology and the birth of the digital age, we will continue to see an increase in economic stimulation and employment opportunities. These are all at the core of a successful CRE market. How do you think the election will affect CRE? Is there anything we missed? Here are some articles we've referenced in this post: 10 Tips for Beginners in the Appraisal Industry How the Election Year Impacts Commercial Real Estate Will the Upcoming Election Affect Job Growth and/or the Real Estate Market? How Will the Presidential Election Impact Markets? How Presidential Elections Affect the Markets Relief Rally
1 Comment
7/30/2016 09:04:39 am
I have been through several posts on this very subject but the satisfactory information that I found here is something that all other blogs are missing.
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