SVN® Internation Corp. Economic Update – Keeping our clients up-to-date about the latest real estate landscape trends.
In December, the MSCI RCA Commercial Property Price Index indicated that the decline in US commercial property prices slowed down. Notably, the industrial sector demonstrated resilience, experiencing a 0.3% monthly increase and a 0.5% yearly rise in property prices. However, a recent analysis by Commercial Property Executive suggests that although the segment has been a standout performer, growth is expected to slow. With 505 million sqft of industrial space under construction as of November 2023, stakeholders are adjusting to increased financing costs, anticipating a pullback in project deliveries by the second half of 2024. Meanwhile, global supply chain concerns arising from the Red Sea crisis are adding complexity to the real estate and construction landscape. A BisNow analysis shows that shipping costs skyrocketed during the first two weeks of January in response to the recent Houthi rebel attacks on Red Sea shipping.
On a brighter note, the University of Michigan’s consumer sentiment soared to 78.8 in January, its highest mark since July 2021, according to the preliminary estimate. Consumer confidence was primarily boosted by views that inflation has turned a corner and income expectations are beginning to strengthen.