Commercial Real Estate Braces for Roller Coaster Ride as we Head Into 2008, According to Colliers International
December 12, 2007
2007, and the last 100 days in particular, have been times unlike any other. For this reason, in lieu of its annual year-ahead forecast report — since projections have never been more difficult to make — Colliers International has focused its thinking on key themes to watch in 2008 — and how the commercial real estate sector could be impacted.
With a fifty percent chance of a recession, according to many economists, we are all about to become experts on defaults, delinquencies, foreclosures and write-downs. Retail and consumer spending is tenuous at best, job growth is down and this negative trend is almost certain to continue. The effect of skyrocketing oil prices is more psychological than real, but consumers and businesses will surely become more violently vocal about rising energy bills as 2008, and winter, draw near.
“While many economists indicate a 50/50 chance of a recession, Colliers International sees little evidence that a recession will occur,” said Ross Moore, senior vice president and director of market & economic research at Colliers. “We keep close watch on four important indicators: employment, industrial production, personal income and consumer and business sales — and we believe each of these will remain in positive territory as 2008 unfolds. Indeed, as the November jobs report has shown, the employment climate seems to be holding up in the face of challenges in financial markets.”