2024年，期待意想不到的事情!

当我们敲响2024年新年的钟声时，“万岁”!  At this time of year we like to make resolutions on how we pledge to improve our behavior and our decision-making skills. 然而, we also need to remember that there is an old saying, “变化越多, 他们越相像.“也就是说, that we learn that the underlying fundamentals stay unchanged despite what may happen on the surface.

 

期待意外

 

This was brought to mind as I was reviewing the book 一如既往摩根·豪斯著.  His point is that we get used to a normal steady life, 然后, out of nowhere comes an unpleasant surprise, 甚至可能是一场灾难.  But we had become so lulled into the “new normal” that we forgot there is always danger lurking.  Example: no one expected the Covid-19 calamity that is still impacting our lives. Or how about the Great Financial Crisis with the Lehman Bros. 破产和银行崩溃.  我的职业生涯是在储蓄之前开始的 & Loan Crisis of the late 1980’s, a true Depression for Texas real estate.

 

So, every ten years or so, IT hits the fan and we are shocked.  但我们不应该感到惊讶, because a new unexpected crisis keeps happening every five to ten years!  Housel’s point is, “If you want to understand a changing world, start with what stays the same.”, “我们非常擅长预测未来, except for the surprises – which tend to be all that really matters.”  So, we need to slightly over-prepare for the unexpected crisis, 也就是说, 期待意外.  My personal addition is that, “We never know how good, 好 会怎样，或者有多糟， 坏 将.” Just be sure you have prepared for the inevitable bad surprises, for we know that we must survive before we can thrive.

 

So, 2022 and 2023 were not really so calamitous for real estate, but we certainly had a major contraction of credit as interest rates spiked faster than any time in history.  We all know that credit and borrowing drive real estate, because it is typically highly leveraged with construction loans and mortgages.

 

信心改善和CRE反弹

 

Now in late 2023, I think we are seeing the green shoots of a rebound in commercial real estate.  One way to judge sentiment is by looking at publicly owned real estate, such as Real Estate Investment Trusts (REITs) and 365bet苹果客户端。builders, as represented by the Exchange Traded Fund VNQ from Vanguard that holds the stocks of 167 publicly traded real estate companies.

VNQ dropped 38% from the beginning of 2022 to the end of October 2023!  This is a much more volatile benchmark for the value of all types of commercial real estate than privately held real estate that only trades every few years. 然而,it is a good indicator for the attitude and sentiment that the public has toward real estate, and let’s just say it’s been down-right terrible the past two years. But now everyone is seeing light at the end of the tunnel in this seemingly dark night.

 

Future Interest Rate Drops Expected in 2024

 

The FED is pausing the increases in Interest rates with expectation there 将 several rate decreases next year. The 30-year mortgage rates actually dropped from over 8% in October to 6.7%的最近. This should spur home buying in the new year, 尽管, November was a down month for home sales nationally.  我们的朋友, VNQ, has rocketed higher by nearly 25% since the end of October, indicating that public perception of real estate is now suddenly much more favorable.

 

全球最大的商业经纪公司, 世邦魏理仕, forecasts Year 2024 will see an economic slowdown in the first half and this will keep bank lending very tight.  The volume of investment transactions will continue to decline, by maybe 5 percent. The decline in values over the past two years will bottom out in the first half of 2024 at about a 20% overall decrease in values. While interest rates have started to decline, capitalization rates are still edging upward, 大概是0.25到0.5个百分点, which equates to a drop in values of 5 to 15%.

 

办公室, 零售, and Industrial Occupancy Levels Vary

 

然而, each sector is different with office buildings declines at the high end of the range, while industrial buildings are seeing the smallest declines.

 

零售 has been very stable, with strong occupancy levels and consistent sales volumes.

 

办公室的销售, 然而, have dropped from a high of $200-million a quarter back in 2019 down to only $45-million in Q3 2023. This does not help the office building owners who must refinance their mortgages in 2024.  事实上, 最近, the venerable McAllister Plaza on US 281 at Jones Maltsberger, 在机场附近, 被当地的SageView Partners收购了吗, when the owners couldn’t refinance the building, 虽然有91%是租来的.

 

德克萨斯州的GDP是美国的两倍多.S.

 

在德克萨斯州, 我们做得很好, as shown by the Texas Workforce Commission recent report that the state added 26,仅11月份就有800个工作岗位, 这是10月份的一个很好的转变, 哪里损失了1,300个工作岗位. Up to that point, Texas had positive job growth every month for nearly three years. For the year from December 2022 to November 2023, we created 407,000 jobs, a 3.1%的增长率，与美国相比是有利的.S. 速率1.据《365bet》报道，8%.  Couple these stats with the fact that Texas’ second quarter GDP grew at a rate of 4.9%，是美国的两倍多.S. 速率2.1%.  干得好，德州!

 

因此，让我们举杯庆祝新年的开始!

We survived ’23, so let’s roar into ’24 to thrive in ’25!!!