A new market forecast by a Global property consultant company called CBRE suggests that U.S. economic growth will potentially go downhill in 2024. This will cause the commercial real estate transaction values to go down further. It will lead to compelling buying opportunities. Based on the 2024 U.S. Real Estate Outlook.
Also, the CBRE economists are of the opinion that resilient consumer spending can counter the economic headwinds in the coming year. This will also include high interest rates near recession situations in China and Europe. Also, they predict a slight rise in the unemployment rate by the percentage of 4.5%. Also, inflation may easily allow the Federal Reserve to reduce short-term interest rates and bring it to around 4.25% by the time 2024 ends. More so, they can reduce it down to 3.5% by the end of 2025.
This expectation of the initial rebound and bottoming out of the initial rebound should affect all the sectors in the real estate department (commercial real estate). According to CBRE, there seems to be a sign of property values going further down in the first half of the year prior to activity rebounding in the following year.
“There is a bit more real estate pain ahead, but stabilization and the early stages of recovery aren’t far behind that,”
said Richard Barkham, CBRE Global Chief Economist and Global Head of Research.
“Investment volumes will be down overall for 2024 but will start an upturn in the second half. And leasing activity will pick up a bit from a sluggish 2023.”
The demand for commercial real estate property will keep exceeding supply, raising pricing by 10% and reaching a mark of 15% in the coming 2024, following an expected increase of 16% in 2023.
Construction activity will exceed 3000 MW in 2024 in major markets, compared to the 2023 estimate of 2500 MW by CBRE. Markets in San Antonio, Austin, and Omaha will bring in more investment and development because of land availability, tax incentives, and power infrastructure development.
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