The New Year will be a good year - by Rick Kaplan

In 2018 we were supposed to see an economic slow down. It never happened. With plenty of money available, new construction projects have started, rental rates continue to increase and cap rates are stable. So is 2019 the year we start to see the down turn or do we see the market continue to grow?

My personal prediction for 2019 is the slow down is coming but not in 2019. Here are my thoughts and why. According to the website, The Balance, the U.S. stock market will stabilize with slight growth, unemployment rates to stay low, interest rates will increase just slightly (not enough to make any impact), oil prices stay stable, manufacturing will see growth, trade wars will see some relief and GDP will see slight slow down. With many new projects in the pipeline to begin in 2019 this will prove to be same growth as 2018. All of the economic signs are pretty positive for 2019 but we will see signs of the slow down and start to feel it in the 4th quarter of 2019 and into 2020.

As we all know the real estate industry has its cycles and there is no doubt that the down turn is coming. The real estate experts have been saying we will see the start of the down turn in 2016 and wasn’t much of one, then in 2017 and 2018 they have said the same thing and nothing. But in 2018 we have seen some signs with interest rates bumped up a little, construction costs increasing, skilled labor shortages and few other signs. So maybe the signs are all there that eventually we will see the down turn maybe in 2020. Until then let’s enjoy the ride and stay prepared for the eventual slow down.

Let me know what you predict for 2019. Happy New Year! 

Rick Kaplan is the event coordinator at NEREJ, Norwell, Mass.