The 2013 Year Ahead
News media of all kinds, including “expert” subscription publications, are full of diverse opinions about national and regional economic scenarios in 2013. The gloom merchants are projecting dire global consequences from the United States’ political stalemate that continues even after the strong Obama win in the presidential election. The happy faces are projecting political compromise, with increasing strength in the stock market and employment growth. As usual, the vast majority of cautious forecasters are hedging their opinions with “if come” statements prior to projecting economic stability with modest growth throughout the calendar year. Their forecasts are based on historical trends rather than current consumer research.
Most pundits in this country appear to support the Federal Reserve policy of continuing low interest rates which have motivated modest growth in the housing industry over past months, despite a brief slowdown at the end of the year. The multi-family rental apartment growth continues nationwide, despite expected over-supply concerns in some markets where new employment opportunities have lagged for singles and couples in their 20s. Consequential concern over potential rental apartment “bubbles” persist in many markets, resulting in declining money supply and new starts. However, knowledgeable economists project that the full nationwide real estate sector will continue to improve throughout 2013.
Clearly, the veil of uncertainty among both lenders and developers leads to careful scrutiny on site locations for both residential and commercial projects extending beyond 2013. Earlier this month, in response to several phone and email requests about uncertainty, we prepared a “special edition” of this newsletter for our clients describing the importance of local consumer research to properly evaluate local consumer demand for new development, in addition to preferential site locations. Past performance achieved through competition surveys provides woefully inadequate support for new development decisions in this era of rapidly changing household size and employment security. Parker Associates has focused on consumer research and analysis to guide real estate development decisions since its initiation in 1982.
If you would like a copy of this special blog, or to discuss our efficient methods of defining future consumer demand and specific preferences in your marketplace, please contact me at (904) 992-9888 or firstname.lastname@example.org or got to www.parkerassociates.com. As always, there is no charge for vocal or email discussions.
DFP, February 2013