I recently attended the 25th annual Real Estate Trends conference organized and hosted by the VCU School of Business in Richmond. This was my first time attending and I found that the speakers were informative and provided useful information regarding national real estate trends, government sponsored programs to support housing initiatives, and the movement towards using social media in real estate.
I thought I would share with you the top takeaways from the best of the presenters. She is Mary Ludgin and is a partner and Director of Global Research at Heitman. Heitman is a Chicago-based, global investment firm focused solely on real estate.
Email me back if you would like to see the full version Ms. Ludgin’s presentation and I’ll get it to you.
Here are the highlights of Ms. Ludgins comments:
-Economic Recovery has only been OK, but US Real Estate has had a strong performance with unleveraged real estate returns over the last 4 years exceeding 11%.
-We are closer to the end of the expansion than the beginning. Average post-WWII period between recessions is 61 months, we are now in month 75 since the bottom of the last recession.
Average recession begins 5 years after FED starts to tighten, which hasn’t happened yet and 5 years after housing starts reach 1 million units which occurred in January 2015.
Other factors were discussed but they all point to it being closer to the end of the expansion than the beginning. Mary’s “guess” was that we still have about 1 to 3 years left in this expansion.
-Offshore buyers are representing a greater percentage of cross-border investors growing from 7.6% to over 10.7%. European and Australian investors are moving into the US.
-Strong growth is dependent on strong job growth. While the US has been relatively flat, certain metro areas like Austin, San Jose and Charlotte have been thriving.
-Industrial RE market hasn’t peaked yet but is trending up. Apartments are still hot everywhere. Office space has been a slow recovery due to slow job growth, redesign of space, and shrinking square foot per worker. Retail-Top end is doing well, older less attractive space needs to be repurposed.
Forward-looking Investment Advice (screen shots taken from Ms. Ludgin’s presentation)
I hope you find the informational interesting and useful.
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Enjoy your weekend,