CBRE predicts a slowing of economic growth in 2024, but experts believe that a recession can be avoided and real estate transaction values will continue to decline. This presents an opportunity for savvy investors, according to the company’s 2024 U.S. Real Estate Outlook.
Economists at CBRE anticipate that strong consumer spending will counteract potential economic challenges such as high interest rates and recessions in other parts of the world. They also predict a slight increase in the U.S. unemployment rate to 4.5%, with easing inflation allowing for lower short-term interest rates by the end of 2024.
This expected stabilization and initial rebound will impact all sectors of commercial real estate, including tight lending conditions, further declines in property values before recovery begins later on, office vacancy reaching its peak level before stabilizing, and an influx of multifamily construction projects.
According to Richard Barkham, global chief economist and global head research at CBRE: “While there may be some continued struggles ahead for real estate markets overall during this time period, we are already seeing signs of stabilization and early stages of recovery.” He also believes that investment volumes may decrease initially but start picking up again by mid-year while leasing activity improves from sluggish levels seen earlier on.
The article originally appeared on Connect CRE’s website.
