How Consumer Sentiment Impacts Commercial Real Estate
The Media Often Miss The Mark On CRE Demand
- Media reports attributing rising rents to the apartment demand slowdown are missing a crucial factor that influences space demand across CRE
- Consumer Sentiment fell to a record low late in 2022, but has begun climbing again
Consumer Sentiment Will Be A Force Shaping The CRE Outlook
- Consumer sentiment strongly influences household formation, and strong household formation numbers aid numerous types of commercial real estate
- Inflation and recession fears brought the metric down last year, but should expand again as consumers regain confidence in their financial situations
What Will Bolster Sentiment In 2023?
- Inflation and Fed actions shape the public opinion on the economy, if the Fed keeps rate movements small and inflation continues diminishing, sentiment should rise
- If the Fed can achieve this goal without sizable rate movement and avoid recession, consumers should regain confidence and CRE space demand should rise
*Through February
Sources: Marcus & Millichap Research Services, University of Michigan
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