All Forum Posts by: Steven Roberts

Any time Paul. Though I don't believe consumer prices will ever recede back to pre-pandemic levels, wages continue to increase https://www.epi.org/nominal-wage-tracker/
and inflation is receding and we expect a series of fed rate cuts over the coming year, so although this should be sufficient to prevent recession, the reality is that we can't predict this with 100% accuracy. A little luck and faith may be in order as well! 

Hey Paul, contrary to the expectations of analysts, the U.S. economy gained momentum in 2023 despite higher interest rates intended to temper economic growth. After a robust annualized third quarter (GDP) growth rate of 4.9%, GDP expanded at an annualized rate of 3.3% in the fourth quarter, and the economy grew by 2.5% - exceeding 2022’s 1.9% growth rate, so I personally don't see a recession coming into play as the economy continues to show signs of strength.

2023 also showed accelerating economic momentum instead of what many anticipated would be a slow growth period. I believe the main reason is that consumer spending has remained strong, which drives consistent economic growth.  

The easing of Inflation’s appears to be directly related to the Fed's decision, dating back to 2022, to raise the primary interest rates. By July 2023, the Fed hiked the fed rate to 5.25% - 5.50%, up from near zero percent before rate hikes began and the economy continues to flourish. There is a day of reckoning coming for commercial debt as between a shrinking office market and multifamily notes coming due which will raise debt service to levels that will likely put many multi unit properties underwater as rents data have also flattened and more than 50% of consumers spend more than 30% of their income on rent which is adding pressure to rent increases even inspite of low rental inventory. 

Stick with the plan, invest in multifamily properties that meet the model investment criteria.

An interesting recast of U.S. home values by geographic market. https://www.fastcompany.com/91015535/housing-market-home-pri...

Always looking to add investment partners through JV's and and syndication deals Ellen.

Cheers,

Steven 

Potential good news from the CBRE forecast for commercial real estate.

Executive Summary

• U.S. GDP increased by 3.3% on an annualized basis in Q4 2023, handily surpassing expectations of 2%.
• Strong growth was accompanied by good news on the inflation front, with the Core Personal Expenditures Price Index meeting the Federal Reserve’s 2% target in Q4. This should keep the Fed on track to cut short-term interest rates by May.
• CBRE expects the U.S. economy to slow this year and achieve a rare soft landing rather than a full-blown recession. However, rising real interest rates and global economic weakness are major headwinds.
• Slowing growth and lower inflation should drive the 10-year Treasury yield down to 3.6% by year-end. This will support a recovery in investment activity in the second half of the year.

Q4 2023 GDP

Strong consumer spending, business investment and government expenditures contributed to GDP growth of 3.3% in Q4, easily beating Wall Street expectations of 2% growth. Consumers continued to spend on both goods and services. Business investment was generally strong across the board, with notable spending on structures. Government spending also was strong. On the inflation front, the Core Personal Consumption Expenditures Price Index met the Fed’s 2% target in Q4 on a quarterly basis.

CBRE Forecast

While core inflation fell in Q4, jobless claims from a week ago were higher than expected. This illustrates the balance of risks that the Fed must consider going forward. As such, we anticipate the Fed will cut the federal funds rate by May. Amid slowing growth and rate cuts, we anticipate the 10-year Treasury yield will slowly decline, ending the year at 3.6%. A very rare soft landing for the economy seems most likely.

Healthy economic growth bodes well for leasing demand, which we expect will be resilient in 2024. As the Fed cuts short-term rates and long-term rates fall, we expect investment activity to pick up in the second half of the year.

Jennifer, I'm a real estate investor and seeking Mastermind partners to form JV's/Syndications to build a portfolio of multifamily properties. Happy to connect and discuss if we may be a good fit as investment partners.

All the Best,

Steven

Thank you Samuel. I would like to know more about the Melbourne area as it is a growth market and one of the remaining 'affordable' areas in Florida. I am focused on the greater Tampa area, Sarasota, Orlando, Palm Harbor, Cape Coral & Port St. Lucie. I look forward to hearing from you.

Steven

Thank you Ronald, I appreciate the positivity and would like to know if you can provide partnership support for the Florida market in terms of unique contractual review and securities oversight. 

Always open to syndication partnership as well. 

Cheers,

Steven

 Would love to network and learn more about your experiences and investment strategies Chris. Let me know if you have 20-30 minutes this week to chat.