The TrendCzar is currently on vacation. We thought we would use this opportunity to revisit some previous posts. Comments?

Inflation Hedge (originally posted April 28, 2008)

My next door neighbor who develops houses in Vermont has three unsold and unrented, and lamented to me yesterday the vagaries of the housing market. "You always know where you stand with the stock market," he said. "With real estate it's so hard to tell, and all of a sudden it hits you."

At that point another neighbor drove up and got involved in the discussion: "Haven't seen inflation like this in quite a while," he said. "I bought a loaf of bread and a half gallon of grapefruit juice yesterday and I couldn't believe the cashier wanted $9.50 for just the two items."

"Yeah I got some plums and peaches the other day, and it cost $11," said my next door neighbor. "It's amazing."

I joked with the other guy that he had "just burned up a couple of dollars worth of gas," idling his car while talking to us. But maybe it was no joke--I paid my first $60 gallon fill up yesterday.

"Hey, you're right," he said, before taking off.

You know it's really getting out of control when Costco limits the number of bags of rice you can buy. And we think we have it rough when people in many parts of the world have suddenly been priced out of survival staples--rice and grains.

Which brings me back to real estate. The commercial markets haven't taken their big hit yet, but you know it's coming. We're taking it on the chin from factors now extending well beyond the credit crunch fall out. The economy's swoon now embodies a powerful one-two punch of recession and inflation, which could lay out a lot of businesses, hitting shopping centers and hotels first as consumers cut back and summer vacationers stay close to home. Expect the unemployment rate to take a sudden jump by the end of the quarter, which will just fan the fire.

It reminds of the early 80s when our biggest selling point for real estate was that it's a great inflation hedge. Well, it's time to dust off that old slogan again.

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Jonathan D. Miller

A marketing communication strategist who turned to real estate analysis, Jonathan D. Miller is a foremost interpreter of 21st citistate futures – cities and suburbs alike – seen through the lens of lifestyles and market realities. For more than 20 years (1992-2013), Miller authored Emerging Trends in Real Estate, the leading commercial real estate industry outlook report, published annually by PricewaterhouseCoopers and the Urban Land Institute (ULI). He has lectures frequently on trends in real estate, including the future of America's major 24-hour urban centers and sprawling suburbs. He also has been author of ULI’s annual forecasts on infrastructure and its What’s Next? series of forecasts. On a weekly basis, he writes the Trendczar blog for GlobeStreet.com, the real estate news website. Outside his published forecasting work, Miller is a prominent communications/institutional investor-marketing strategist and partner in Miller Ryan LLC, helping corporate clients develop and execute branding and communications programs. He led the re-branding of GMAC Commercial Mortgage to Capmark Financial Group Inc. and he was part of the management team that helped build Equitable Real Estate Investment Management, Inc. (subsequently Lend Lease Real Estate Investments, Inc.) into the leading real estate advisor to pension funds and other real institutional investors. He joined the Equitable Life Assurance Society of the U.S. in 1981, moving to Equitable Real Estate in 1984 as head of Corporate/Marketing Communications. In the 1980's he managed relations for several of the country's most prominent real estate developments including New York's Trump Tower and the Equitable Center. Earlier in his career, Miller was a reporter for Gannett Newspapers. He is a member of the Citistates Group and a board member of NYC Outward Bound Schools and the Center for Employment Opportunities.