The Economic Outlook for Real Estate Investors and Decision Makers

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

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  • http://research.stlouisfed.org/fred2/graph/?chart_type=line&s[1][id]=CMDEBT&s[1][transformation]=pc1CMDEBT (MD changed to % change from yr. ago) - Updated: 9/16/11 (Qtrly.)
  • http://research.stlouisfed.org/fred2/series/PSAVERT/18PSAVERT - Updated: 9/30/11 (Mo.)
  • http://research.stlouisfed.org/fred2/series/ECOMSAECOMSA - Updated: 8/16/11 (Qtrly)
  • http://research.stlouisfed.org/fred2/series/USPRIVUSPRIV - Updated: 9/2/11 (Mo)
  • http://research.stlouisfed.org/fred2/series/FYFSDFYFSD - Updated: 2/17/11 (Annual)
  • http://research.stlouisfed.org/fred2/series/TWEXMMTH?cid=95TWEXMMTH (value of the dollar) - Updated: 10/3/11 (Mo)
  • http://research.stlouisfed.org/fred2/series/BASEBASE - Updated: 9/29/11 (Bi-Wkly)
  • http://research.stlouisfed.org/fred2/series/MZMVMZMV - Updated: 9/29/11 (Q)
  • http://research.stlouisfed.org/fred2/graph/?chart_type=line&s[1][id]=MZMSL&s[1][transformation]=pc1MZMSL - Updated: 9/30/11 (Mo)
  • http://research.stlouisfed.org/fred2/graph/?chart_type=line&s[1][id]=CPIAUCNS&s[1][transformation]=pc1CPIAUCNS - Updated: 9/15/11 (Mo)
  • http://research.stlouisfed.org/fred2/graph/?chart_type=line&s[1][id]=GS10&s[1][range]=5yrsGS10 (See slides 83 & 87) - Updated: 9/7/11 (Mo)
  • The Economic Outlook for Real Estate Investors and Decision Makers

    1. 1. The Economic Outlook <br />
    2. 2. The Economic Outlook for Real Estate Investors and Decision Makers<br />Dr. Mark G. Dotzour<br />Chief Economist<br />Real Estate Center at Texas A&M<br />College Station, Texas<br />dotzour@tamu.edu<br />
    3. 3. Topics for Today<br />The outlook for job growth and the economy<br />The investment environment<br />
    4. 4. Consumer Confidence Index<br />Source: The Conference Board<br />
    5. 5. Consumers Paying Down Debtfor First Time in 50 Years<br />
    6. 6. Personal Saving Rate <br />
    7. 7. Internet Sales Exploding<br />
    8. 8. Corporate Profits (With Inventory Valuation Adjustment & Capital Consumption Adjustment)<br />Source: Department of Commerce<br />
    9. 9. Small Business Outlook“Planning To Hire People In The Next Six Months”<br />National Federation of Independent Business<br />
    10. 10. Industries Under Regulatory Distress<br />Health Care<br />Health Insurance<br />Autos<br />Electric Utilities<br />Coal Companies<br />Banks and Mortgage Lenders<br />Aircraft Makers<br />Homebuilders<br />Appraisers<br />Offshore Drillers<br />Natural Gas Exploration<br />Residential and Commercial Realtors<br />
    11. 11. Corporate Hiring Plans: Next 6 Months<br />Q3-11Q2-11Q1-11 Q4-10 <br />More Jobs 36% 51% 52% 45% <br />Less Jobs 24% 11% 11% 18% <br />Source: Business Roundtable<br />
    12. 12. Business Hiring<br />
    13. 13. Government Sector:Unfathomable Budget Deficits<br />
    14. 14. Trade Weighted Exchange Index: Major Currencies <br />
    15. 15. Money Supply and Velocity:Huge Monetary Base Could Fuel Inflation<br />
    16. 16. Money Supply and Velocity:Velocity at Historic Low Levels<br />
    17. 17. Money Supply and Velocity:Actual Money Supply Barely Increasing<br />
    18. 18. Inflation Rate:CPI Remains Low Despite Food/Fuel<br />
    19. 19. Ten-year Treasury Rate<br />
    20. 20. Margin DebtDebit Balances at Broker/Dealers<br />Jul 2007 Dow 14,021<br />Jul 2008 Dow 10,827<br />Jul 2009 Dow 8,087<br />Mar 2000 Dow 11,234<br />Mar 2001 Dow 9,106<br />Mar 2002 Dow 7,415<br />Source: Standard and Poor’s<br />
    21. 21. International Capital Flows<br />1983 to 1986 U.S. Commercial RE<br />1987 to 1989 Japanese Stocks<br />1992 to 1997 Asian Tigers<br />1997 to 2000 U.S. Stocks<br />2004 to 2007 U.S. Commercial RE<br />2007 to 2010 BRIC Countries and Commodities<br />2010 to 2011 U.S. Treasuries, Gold, Swiss Franc U.S. Trophy CRE<br />Next stop U.S. stocks ?<br />Next stop U.S. real estate?<br />
    22. 22. Key Issues for 2012<br /><ul><li>When will the housing market clear?
    23. 23. When will the commercial real estate market clear?
    24. 24. Who is right? The gold buyer at $1800 per ounce or the 10-year treasury bond buyer at 1.75%.
    25. 25. It appears that major business and investment decisions will be postponed until after the 2012 election.
    26. 26. If the stock market swoons, look for more QE.
    27. 27. Interest rates stay low though all of 2012.
    28. 28. Could be some enthusiasm in the spring and summer of 2012 if polling data is encouraging for business owners.
    29. 29. Major inflection point in the first quarter of 2013.</li>

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