ORLANDO-With the new calendar year comes new predictions of a commercial real estate recovery. As the month of January winds down, the last of the predictions for 2011 are rolling in, including what George Livingston, chairman of NAI Realvest in Maitland, is calling good news for 2011 and 2012.
“Consumption—measured by Gross Domestic Product—is the main driver of economic activity," Livingston says. “Consumption is up nearly 8% over last year and this will undoubtedly lead to increased GDP growth, estimated at about 3% in 2011. That will have a positive impact on creating jobs, which ranks as the strongest economic indicator we have.”
Livingston points to economic predictors suggesting employment should increase by an average of about 150,000 jobs per month in 2011. That, he says, means more confidence in the nation's economy and higher GDP growth.
"At the same time, the current rate of employment will keep inflation pressures low over the foreseeable future," Livingston says. "This confluence of factors is leading to increased optimism among small businesses, which will lead to increased investment and new jobs.”
Livingston also notes the agreement reached between the Obama administration and Congress as helpful to the economy. "The downward trend we might have expected from a tax increase is at least delayed," he says. "That will prove to be a big boost.”
As Livingston sees it, this all that adds up to new demand for commercial real estate space. He predicts the nation’s economic environment will improve slowly during 2011, and he anticipates even higher growth in 2012.
But Jack McCabe, principal analyst at McCabe Research & Consulting, has what he feels is a more realistic view. Over the past five years, he’s noticed a trend: at the start of every year, most commercial real estate brokerages make predictions that are generally positive.
“The results have usually differed greatly from these projections,” McCabe tells GlobeSt.com. “While there are a few indicators of positive developments in the marketplace, due to the excess inventory and amount of foreclosures and short sales this year, we are not anticipating any real positive movement in the Florida marketplace until sometime in 2012.”
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