Hessam Nadji, president and CEO of Marcus & Millichap
LOS ANGELES—"This is probably the most confusing time we have had." So said Hessam Nadji, president and CEO of Marcus & Millichap, who is a widely regarded top expert in research and investment trend forecasting. During his keynote presentation at the GlobeSt. APARTMENT conference here last week, Nadji provided his analysis of where the market is heading and the long-range factors to consider, discussed the yield curve "uninversion" and more.
According to Nadji's economic annual check-up, since 2007, we have increased in population, with more households forming than in 2007 and have more job openings today, actually exceeding the number of people looking for work. "That is an incredible testament to the economy and its expansion," he said.
What is undervalued in all the analysis and forecasting that goes on is the fact that we are an aging population, explained Nadji. He pointed out that 10,000 baby boomers turn 65 every day. "We are the only economy where we are also adding 12,000 people turning 21 every day. We have an amazing demographic wave at both ends of the spectrum which is driving this economy."
In term of concerns, he did have a few more than usual. He discussed concerns of the yield curve "uninversion" noting that it is a gauge of fear since seven of the last nine inversions had a recession within 16 months. Having said that, he said there were a few unforced errors that threw things off balance such as an aggressive Fed policy that over-shot inflation, he said. "We now have to catch up."
Trade was another fear factor he touched on that is "creeping into our business." And while he did have more concerning slides than he did two years ago at the APARTMENTS conference, the strengths in the market are hard to ignore, he said.
"We have a housing market that is undersupplied by 1.7 million units in comparison to household formation," he said, adding that housing was the major cause of the last major crash because of predominantly over lending within housing, but housing is now one of the most stable pillars of the economy.
"Think about how many new units we have added to this marketplace. Vacancies are still around 4% as a whole…what an incredible combination of supply and demand."
According to Nadji, assuming trade wars are resolved, the next recession should be "normal."
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Natalie Dolce
Natalie Dolce, editor-in-chief of GlobeSt.com, 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.
