SAN DIEGO—Globally, one of the key questions economist Mark Boud, SVP of Metrostudy, receives these days is about oil. “In the short run, lower oil prices in most markets have been beneficial,” said Boud, who spoke at the Crittenden National Real Estate Conference 2016 here Monday morning. “It puts money back in the pockets of the consumer and that multiplier effect has had a great impact.”
During the event's opening session, “State of the Industry: The Future of Commercial Real Estate,” Boud said that the drop in oil prices “represents more wealth floating around in the economy.” And while he said that this effect wasn't seen much last year due in part to the large amount of consumer debt, he says there will be more of an impact this year due to the strides consumers have made in terms of paying off that debt. “We will see more spending.”
In regards to jobs, it is Boud's prediction that 2016 will mark the peak with three million jobs created. “The reason it is at such a healthy level is because there is a lot of slack in the system because a lot of people are under-employed.” He added that the labor pool will be too tight to continue to grow fast. “It will still be positive but just at a slower rate.”
In terms of housing, Boud said that inventory is building, but still isn't at the long-term norm. As for mortgage rates, they are going up gradually, Boud noted. And in terms of household income, it is expected to grow, “which helps consumer spending.”
But where are the hot spots going forward? According to Boud, it will be in places that have increasing demand for housing that are doing well in job markets. He mentioned the Florida markets and the West Coast, including California and the Pacific Northwest. A smaller market that is really hot, Boud said, is Salt Lake City and he also cited Detroit, where job growth is strong and it is inexpensive to live.
The markets that “you have to be careful in,” according to Boud, that have begun to plateau already, include Houston, Denver, and Chicago, among others. “Some of the other mid-country areas are also struggling,” he said. “There are hot spots in each of those, but you have to be very careful… The demand isn't overwhelming and the supply is catching up in those markets.”
Check back in the next day or so for more coverage from the Crittenden national conference.
SAN DIEGO—Globally, one of the key questions economist Mark Boud, SVP of Metrostudy, receives these days is about oil. “In the short run, lower oil prices in most markets have been beneficial,” said Boud, who spoke at the Crittenden National Real Estate Conference 2016 here Monday morning. “It puts money back in the pockets of the consumer and that multiplier effect has had a great impact.”
During the event's opening session, “State of the Industry: The Future of Commercial Real Estate,” Boud said that the drop in oil prices “represents more wealth floating around in the economy.” And while he said that this effect wasn't seen much last year due in part to the large amount of consumer debt, he says there will be more of an impact this year due to the strides consumers have made in terms of paying off that debt. “We will see more spending.”
In regards to jobs, it is Boud's prediction that 2016 will mark the peak with three million jobs created. “The reason it is at such a healthy level is because there is a lot of slack in the system because a lot of people are under-employed.” He added that the labor pool will be too tight to continue to grow fast. “It will still be positive but just at a slower rate.”
In terms of housing, Boud said that inventory is building, but still isn't at the long-term norm. As for mortgage rates, they are going up gradually, Boud noted. And in terms of household income, it is expected to grow, “which helps consumer spending.”
But where are the hot spots going forward? According to Boud, it will be in places that have increasing demand for housing that are doing well in job markets. He mentioned the Florida markets and the West Coast, including California and the Pacific Northwest. A smaller market that is really hot, Boud said, is Salt Lake City and he also cited Detroit, where job growth is strong and it is inexpensive to live.
The markets that “you have to be careful in,” according to Boud, that have begun to plateau already, include Houston, Denver, and Chicago, among others. “Some of the other mid-country areas are also struggling,” he said. “There are hot spots in each of those, but you have to be very careful… The demand isn't overwhelming and the supply is catching up in those markets.”
Check back in the next day or so for more coverage from the Crittenden national conference.
Continue Reading for Free
Register and gain access to:
- Breaking commercial real estate news and analysis, on-site and via our newsletters and custom alerts
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical coverage of the property casualty insurance and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
Already have an account? Sign In Now
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
Natalie Dolce
Natalie Dolce, editor-in-chief of GlobeSt.com and GlobeSt. Real Estate Forum, is responsible for working with editorial staff, freelancers and senior management to help plan the overarching vision that encompasses GlobeSt.com, including short-term and long-term goals for the website, how content integrates through the company’s other product lines and the overall quality of content. Previously she served as national executive editor and editor of the West Coast region for GlobeSt.com and Real Estate Forum, and was responsible for coverage of news and information pertaining to that vital real estate region. Prior to moving out to the Southern California office, she was Northeast bureau chief, covering New York City for GlobeSt.com. Her background includes a stint at InStyle Magazine, and as managing editor with New York Press, an alternative weekly New York City paper. In her career, she has also covered a variety of beats for M magazine, Arthur Frommer's Budget Travel, FashionLedge.com, and Co-Ed magazine. Dolce has also freelanced for a number of publications, including MSNBC.com and Museums New York magazine.
