Dr. Mark Dotzour gave an economic outlook from a commercial real estate perspective at 2011 CCIM Live!

1. The Economic Outlook

2. The Economic Outlook for Real Estate Investors and Decision Makers Dr. Mark G. Dotzour Chief Economist Real Estate Center at Texas A&M College Station, Texas dotzour@tamu.edu

3. Topics for Today The outlook for job growth and the economy The investment environment

4. Consumer Confidence Index Source: The Conference Board

5. Consumers Paying Down Debtfor First Time in 50 Years

6. Personal Saving Rate

7. Internet Sales Exploding

8. Corporate Profits (With Inventory Valuation Adjustment & Capital Consumption Adjustment) Source: Department of Commerce

9. Small Business Outlook“Planning To Hire People In The Next Six Months” National Federation of Independent Business

10. Industries Under Regulatory Distress Health Care Health Insurance Autos Electric Utilities Coal Companies Banks and Mortgage Lenders Aircraft Makers Homebuilders Appraisers Offshore Drillers Natural Gas Exploration Residential and Commercial Realtors

11. Corporate Hiring Plans: Next 6 Months Q3-11Q2-11Q1-11 Q4-10 More Jobs 36% 51% 52% 45% Less Jobs 24% 11% 11% 18% Source: Business Roundtable

12. Business Hiring

13. Government Sector:Unfathomable Budget Deficits

14. Trade Weighted Exchange Index: Major Currencies

15. Money Supply and Velocity:Huge Monetary Base Could Fuel Inflation

16. Money Supply and Velocity:Velocity at Historic Low Levels

17. Money Supply and Velocity:Actual Money Supply Barely Increasing

18. Inflation Rate:CPI Remains Low Despite Food/Fuel

19. Ten-year Treasury Rate

20. Margin DebtDebit Balances at Broker/Dealers Jul 2007 Dow 14,021 Jul 2008 Dow 10,827 Jul 2009 Dow 8,087 Mar 2000 Dow 11,234 Mar 2001 Dow 9,106 Mar 2002 Dow 7,415 Source: Standard and Poor’s

21. International Capital Flows 1983 to 1986 U.S. Commercial RE 1987 to 1989 Japanese Stocks 1992 to 1997 Asian Tigers 1997 to 2000 U.S. Stocks 2004 to 2007 U.S. Commercial RE 2007 to 2010 BRIC Countries and Commodities 2010 to 2011 U.S. Treasuries, Gold, Swiss Franc U.S. Trophy CRE Next stop U.S. stocks ? Next stop U.S. real estate?

23. When will the commercial real estate market clear?

24. Who is right? The gold buyer at $1800 per ounce or the 10-year treasury bond buyer at 1.75%.

25. It appears that major business and investment decisions will be postponed until after the 2012 election.

26. If the stock market swoons, look for more QE.

27. Interest rates stay low though all of 2012.

28. Could be some enthusiasm in the spring and summer of 2012 if polling data is encouraging for business owners.

29. Major inflection point in the first quarter of 2013.