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Deke's Investment Blog - April 24, 2016

Real estate market outlook, some see continued growth, other see a looming recession.

  1. The housing market will continue to grow, according to a Wall Street Journal article on April 18, 2016. Positive factors sited include the growing job market, newly formed households, low interest rates and increased new home sales

  2. Grosvenor Group, large scale London manager of commercial property, reports at their recent annual meeting that rising property values could be approaching a reversal point. They say it is not possible to predict when the market will turn, but it’s only a matter of time. High end housing market in London and New York softened last year. They are planning for a slowdown in high end commercial and residential real estate. Strategy includes selling selected assets and reducing debt.

  3. Billionaire Sam Zell, who correctly called the last recession, predicts that global problems are likely to tip the U.S. into recession in 2017. Blackstone Group, large investment manager, has another view. They say real estate growth will continue, but slower. Presently there is too much capital chasing too few opportunities. Commercial real estate values have been on a steady upward trend since 2009, now in its 7th year the expansion is over two years beyond the average length of recovery. When recession does hit Zell thinks it will be a more mild version. Zell is selling properties in suburbs and concentrating on more densely populated cities.

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