Last year marked the 11th year of this economic cycle, the longest stretch of economic growth that we have ever seen in U.S. history. The good news for the economy in 2020 is that a recession is unlikely barring some shock like war, a terrorist attack or a natural disaster. The bad news is GDP will moderate continuing last year’s trend of gradual slowing. Expect growth of 1.9%, down from 2.3% in 2019 and 2018’s brisk 2.9% pace. The second half of 2020 will be better than the first. Interest rates are still historically low and indications are the Federal Reserve will not be making any changes by either cutting the interest rate or hiking the rate. Inflation remains in check running at about a 2.2% level. There’s ample capital looking for investments. The economy remains in a great place giving no reason to fret about the end of the good times.
Sustained demand for rentals amid a slowdown of deliveries in our market in 2019 led to rising occupancy rates. As the price of home ownership continues to rise renting remains a popular option for many people. Even for those individuals who can own, renting an amenity-rich apartment near work and lifestyle centers presents a very favorable choice.
Apartments remain the darling of all real estate sectors. There is more capital chasing apartments than any other sector, and is the preferred real estate by lenders followed by industrial.