On September 19, the Federal Reserve announced a decrease of 50 basis points in the Effective Federal Funds Rate. This decision sparked economic concerns and was discussed in Marcus & Millichaps’ recent video titled “Will Black Swan Events Derail the Fed and CRE Outlook?”
One such event was Hurricane Helene, which caused significant destruction after making landfall in Florida. According to John Chang, Senior Vice President and National Director of Research and Advisory Services at Marcus & Millichap, this hurricane is expected to have one of the greatest impacts on record both in terms of lives lost and economic damage.
Shortly after Helene’s impact, another hurricane named Milton hit Florida as well with estimated damages reaching billions of dollars. In addition to these natural disasters, tensions rose between Israel and Iran when Israeli ground forces entered Lebanon. Chang noted that this could potentially lead to an increase in oil prices which can negatively affect inflation rates.
Another event that raised concerns was a strike by dockworkers at East Coast and Gulf Coast ports called for by the International Longshoreman’s Association (ILA). Although it only lasted a few days before being resolved through negotiations with US Maritime Alliance (USMX), it created traffic backlogs that took several days to clear up.
Chang focused on this strike during his discussion as experts had predicted its short duration would not significantly impact real estate investments or properties near ports. He also emphasized that real estate operates on long-term investment cycles so any temporary disruptions like port shutdowns would have minimal effects over time.
In conclusion, while these black swan events may cause some short-term disturbances for certain industries like shipping or tourism due to natural disasters or strikes; their overall impact is likely limited when viewed from a long-term perspective especially for real estate investments according to Chang.
