CORONAVIRUS OUTBREAK. MARCH 2020
Stability and Yield of Real Estate Reiterated by Volatility;
Interest Rates Hit All-Time Low Amid Spread of Coronavirus
Uncertainty stemming from the spread of the coronavirus (COVID-19) drove interest rates to a record low as equities traders sought the safety of the bond market. Despite recent volatility, the economy remains well positioned to withstand the current headwinds. The long-term and slower moving nature of real estate makes the sector an attractive investment option, particularly in the current uncertain climate.
- How record low interest rates creates a window of opportunity for investors
- Outlook and impact for six commercial property types
- Key risk factors and considerations for real estate investors
Financial Markets. October 2019
Fed Issues Third Rate Cut, Sustains Prospect of Continued Growth
Fed remains accommodative. In an effort to lengthen the economic runway, the Federal Reserve on Oct. 30 cut the overnight rate by 25 basis points for the third time in 100 days. Domestic growth has been moderating this year, falling to 1.9 percent in the third quarter as the trade war with China curtailed exports and ebbed inventory investment. With tariffs on Chinese goods increasingly coming into play, the economy could face additional pressure, but the Fed has signaled that another rate cut in December will be dependent on incoming data. Several Fed members have argued against additional cuts, as both inflation and unemployment remain very low. A decision on rate policy will largely be determined by the holiday retail season and ongoing trade talks. Should a resolution to the trade war be achieved, the economy and interest rates will likely witness an upward bounce. The Fed’s commitment to short-term Treasury purchases remains another key factor, increasing liquidity in the overnight markets and reducing short-term interest rates. This has helped “uninvert” the yield curve as the three-month Treasury rate fell below the 10-year reading. Though this has reduced recession risk, many speculate that a recession could still be on the horizon.
Houston: On Recovery Road
Multifamily Report Summer 2019
MID YEAR 2019 - MULTI FAMILY OUTLOOK
Apartment Demand Surges to New Peak;
Investors Target Widening Range of Opportunities
Yield-Curve Inversion Reiterates Stability Of Commercial Real Estate
Brief yield-curve inversion sparks volatility. The short-lived inversion of the 10-year and two-year Treasury yield curve sparked significant financial market volatility as the closely monitored sign of an impending recession delivered a warning alert. Despite efforts by the Federal Reserve and generally strong economic metrics, including steady job creation, low inflation, above-average retail sales growth and elevated small-business confidence, financial markets remain concerned about ongoing trade disputes with China. The flight to safety sparked by the uncertainty has pushed the 10-year Treasury rate to the 1.5 percent range, within 20 basis points of the record low set in July 2016. The convergence of these factors has delivered a unique window of opportunity for commercial real estate investors.
Apartment Market Report
U.S. 1Q 2019
U.S. apartment market maintains momentum through slow season, despite continuation of elevated supply
Unemployment Falls to Record Low;
Job Gains Sustain Apartment Demand
Improved employment growth supporting historically low joblessness. Employers added 236,000 positions in April, bringing the year’s total job creation to 820,000, which is on par with previous years in this cycle. Expanded hiring activity compared with March drove the...
Investor Sentiment Report
Investor Caution Ripples From Fourth Quarter Interest Rate Spike;
Sentiment Remains Strong, On Par With Peak of Last Cycle
Fed Signals End of Tightening Cycle; Interest Rates Reignite Opportunities
Interest rates fall as Fed shifts policy outlook. At its latest meeting, the Federal Reserve signaled an end to rate hikes this year, while reserving the potential for one increase in 2020.
Increasingly Sophisticated Retailers
Deploy Range of Growth Strategies
Retail sales showing consistency as year progresses. Softened consumer confidence in March had little impact on spending as core retail sales advanced 3.6 percent year over year. A second consecutive month of moderate yet steady growth can be traced to the healthy job market, rising income levels and...