The U.S. economy is gaining momentum looking into 2019 with additional allocation from investors and expanding construction completions in the office sector.
“CBRE’s 2019 Real Estate Market Outlook, released today, anticipates that absent economic shocks such as sharply rising inflation and import costs, the U.S. economy will generate solid growth amounting to a 2.7 percent gain in gross domestic product and benefiting all sectors.”
Economic growth aids all sectors of the market and helps sustain job growth. CBRE’s Global Chief Economist Richard Barkham says the company sees great opportunities in unexplored secondary markets. Consumer spending and business investments are predicted to continue growing by 2.7% in 2019, although not at the pace of the previous year due to inflation and other factors.
The increase in investments in 2019 should match the levels of 2018, but borrowing costs may slow down due to a rise in bond rates.
There as been a 1.6% growth in office jobs, marking the 10th consecutive year for office sector growth. Office vacancy rates will slightly rise, but occupiers will still favor the coworking environment and flexible lease model. CBRE predicts that low vacancy will push up rent prices.
“New trends likely to add momentum in 2019 include development of multistory warehouses in select markets and a shift to more industrial cold-storage space from retail cold-storage space,” said Barkham.
Retail sales are expected to rise as well, but many retail property owners will be filling their spaces dedicated to sectors such as food and beverage, fitness, offices, and other non-retail uses as consumers continue to move online for much of the retail market.
New complexes are declining, but should balance out the market in 2020, will and homeownership prices and availability should stay strong.