Here are some of the key points from the 2022 REALTORS® Legislative Meetings:
- Yun explained that while the commercial market generally follows the overall economy, some things are different this time.
- “The industrial sector is booming, retail is turning positive, the hotel industry is recovering, apartments are doing very well, and rents are rising in all commercial sectors.”
- Yun added that the residential housing shortage would result in solid rent growth over the next two years, with apartment rents expected to rise by more than 10%.
- “With strong demand, industrial rents will likely keep rising solidly in the next two years while vacancy rates will remain below 5%.”
Though the office sector faces challenges, Yun asserted that not all markets are equal.
- “While the overall office market is shaky, some variance exists depending on location. We’ve seen improvement in some midsize markets as companies seek more affordable office locations away from major U.S. cities.”
- The volume of multifamily investment in 2021 was the most significant year for any asset class in history, with $352 billion of investments, according to Matt Vance, senior director, CBRE.
- “Global economic uncertainty, persistent inflation, and rising interest rates have increased the cost of capital and overall capital market volatility,” Vance said. “These conditions have restricted loan proceeds, negatively affecting asset pricing.”
- Vance expects that with the rise in hybrid-working models, employees will spend an additional day or more working remotely compared to pre-pandemic trends.
- “An average work week with 3.5 days spent working in the office would net a 9% reduction in office demand, but that’s if it could happen overnight,” he said. “Future economic growth and job creation will have a balancing effect on the impact of virtual work.”
- Yun appealed to local governments to ease land zoning regulations, and ordinances, which Realtors® reported have become more burdensome.
