Zandi delivered some grim news regarding potential problems in the nation's economic outlook, but said 2004 is shaping up to be one of the economy's best years and that job growth will rebound. He foresees concerns with the ballooning deficit and an industry rate rise. He also feels the impact of the "massive financial stimulus" will continue to fade by this time next year.
Areas hard hit include the Southeast, which is "getting pummeled by offshore companies" and Boston, which is having problems in the tech sector. Booming areas include the Rocky Mountains, Florida, Austin and Southern California. He also noted that the Central Jersey/Philadelphia/Washington, DC corridor is doing very well, thanks in part to its healthcare and educational services concentration.
Zandi's fellow presenter, Lloyd Lynford, CEO of Reis Reports, echoed similar statements, tailoring remarks toward the real estate marketplace. "Job growth is the juice--without it there is little demand for new space." He noted that even the 112,000 new jobs created in the month of January were "too soft for sustainable growth."
In the New York Metropolitan office market, Lynford noted that "there might be some superior opportunities in the suburban markets." He cited Long Island and Fairfield, CT, in particular. Factors that make suburbs attractive include land-constraints, limited construction and lower vacancy rates. Long Island's current vacancy rate is 11%--the fourth lowest in the nation. It is anticipated to go as low as 8.1% over the next few years. And in Fairfield, construction projections should allow for rents to be pushed up over the next five years.
Lynford called the shopping center arena the "darling" for the past few years, adding that "it will continue to do well." Signs also bode well for the local industrial market as well.
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