Market Forecast & Update - A Glimpse Into The Future
From a business standpoint, 2018 is already shaping up to be quite an interesting year. According to the November 3, 2017 Kiplinger Letter forecast, the year has many “reasons for optimism”. Among the more outstanding factors fueling this prediction: the potential for small business regulation rollbacks from President Trump’s administration; proposed tax cuts (still in negotiations between the Senate and House); the low—and falling—unemployment rate; and a consumer confidence that is higher than we have seen since 2008.
The result of all these factors in combination means that inflation rates are likely to remain in control, rising modestly over the course of the year—2% in comparison with 2017’s 1.7%. Kiplinger anticipates that interest rates will also rise accordingly. Their prediction is for three increases, each in quarter-point increments, bringing the prime lending rate to 5% by year’s end. Mortgage rates are expected to rise a bit more slowly, with the average 30-year home loan averaging 4.3%, as opposed to the current 3.9%.
Identifying areas of business that Kiplinger expects to flourish in the above landscape: home builders, financial firms, mining and energy firms, and corporate for-profits in general.
“That’s great,” you say, “but how does all that apply to commercial real estate?”
First, as consumer confidence remains high, investments should continue to grow, both in terms of the number of consumers who participate in investments and in the rates of return. As many commercial real estate purchases require assistance from investors—sometimes multiple investors—this confidence and investment participation bodes well.
Second, if the business regulations are successfully cut back by President Trump—especially if that diminishment comes in combination with the proposed tax cuts for individuals—small businesses will see potentially dramatic increases in revenue and savings, generating money they can spend on the new or larger buildings they have been dreaming about, or the additional locations they’ve been wanting to launch.
Watching these trends and potentials can be time consuming or overwhelming for a business owner who is already completely immersed in his or her own industry. This is where the experienced professionals at Kima Commercial can be of benefit to you. It is our business to know what is going on in local commercial real estate—to know the answers to the questions you will most certainly have. We would be honored to assist you in making 2018 the year you take your next big step!
Our experienced team of brokers at Kima Commercial can assist you with all of your commercial real estate needs. While we are based in the Raleigh, North Carolina Commercial Real Estate Market, we can assist you throughout North Carolina, and have exceptional resources and partners in all 50 States. Give us a call at (919) 336-1700 and let us know how we can help you.