Recently I heard a humorous quip that is appropriate for the moment we are in: “If you are not confused, it’s because you haven’t been paying attention.” In preparation for writing this blog post I’ve read several 2017 forecasts from well-meaning and well-qualified economists and political commentators. Their opinions vary widely as to what this year is going to bring, much more so than you normally see. Economists usually succumb to the herd mentality. They don’t want to be wrong so they more or less follow what everyone else is saying. Not this year. There are many contradictory opinions about 2017.
Before I give you my thoughts, let me start by saying that the most important events of 2016 were not anticipated. No one predicted that:
- The United Kingdom would vote last June to the leave the European Union.
- Donald Trump would be the Republican presidential nominee, let alone win the presidential election.
And I’m confident there will be other important events in 2017 that no one, not the most seasoned prognosticators, will anticipate. That said, there are really two questions that need to be answered in order to make accurate predictions about commercial real estate in 2017.
- What is the health of the U.S. economy?
- What phase is the real estate market cycle currently in?
Answering these two questions will go a long way in predicting the health of the commercial real estate market in the Pacific Northwest and beyond. (more…)