4. Exports: global weakness persists despite improvement in some large developing countries like China and Brazil.
5. Government: stimulus is having an impact but other initiatives – climate change, health care, deficit reduction, regulation – are increasing consumer and business uncertainty and raising specter of much higher taxes ahead, counteracting stimulus policies.Source: Maximus Advisors 2
7. Macroeconomic Situation Remains Tough Metro Economies Still Struggling Across the Nation, Past 3 Month Job Change Source:: Maximus Advisors Source: Maximus Advisors 4
8. Apartments: More Pain Ahead But Then a More Rapid Recovery than Other Segments 5 Apartment Fundamentals: More Pain; Faster Gain 5
9. Valuations Look to Generally Hit Bottom in 2010 but the Recovery Looks to Be a Slog 6 Outlook for Property Values 6
10. 7 Apartment Market Dynamics Apartment Market Returns More Stable than Other Sectors
11. 8 Apartment Market Dynamics Long-Run Apartment Returns Are Strong, Lower Risk Compared to Other Real Estate Asset Types
12. Multifamily Starts Now Sharply Lower, Completions Set to Plummet 9 Apartment Fundamentals: More Pain; Faster Gain 9
In both the economy and credit markets, we appear to have passed from the “shock and awe” stage to a period of calm, but will little actual forward motion.Most economic indicators have ceased their free-fall, and credit markets are not in crisis mode.Chart on the left shows that in regards to GDP. The chart on the right shows that in regard to credit spreads.But as we dissect the component pieces of the economy, we do not yet see drivers that will fundamentally make the economy grow and most importantly fill up space.DISCUSS SEGMENTS
On the credit market/liquidity front, I show here a gauge that we have been doing since the credit crisis first erupted in the summer of 2007. It is a shorthand measure of the conditions in these various indicators of credit/liquidity health. One year ago, all these indicators were red as the markets totally shut down.Today, thawing has occurred across many parts of the market, thanks to both federal intervention and time to digest. But what is also clear here is that we still do not have fully operational credit markets, least of all in real estate.