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|“The future is lumpy, but not unnavigable,” said Reach Advisors prez James Chung, who joined Reis research guru Dr. Victor Calanog during a ULI New York demographics discussion last week at Kirkland & Ellis. Instead, we’re in a “jump-ball economy,” a continuation of consumers reassessing their preferences, aspirations, and constraints—and it’s a reality we’ll live with for a while. While the top 10% of income earners are still relatively strong, the majority of households aren’t in the position to rebound in the short- and mid-term, he says. Keep an eye on demographic shifts: a 10% increase in immigrant population’s birthrate, 80% of twenty-somethings who’ve never married, and a shift to women in earnings and education. He predicts another 50 million people in the US by 2025, and 36% increase in the 65-plus population by the end of the decade. “Multifamily will see the tailwinds,” he says.|
|Victor and James join Related’s Gregg Gushee, Massey Knakal’sBob Knakal, AmCap’s Jake Bisenius, and Kirkland & Ellis’ Stephen Tomlinson. Victor says we might be back to where we were pre-recession in 2014 or 2015, and projects this year’s GDP growth to be between 3.5% and 4%. State and local government cutbacks will remain a drag on growth, and expect volatility in monthly job numbers; interest rates will stay low for the rest of the year, but watch out for inflationary pressure. Multifamily shows promise: Q4 saw a sharp decline in supply, and some submarkets are showing rent growth above 10%. There’s also empirical evidence for residential “doubling up” of subfamilies and the 25 to 34 set living with parents. Overall, several markets have hit bottom, while others are on way to a healthy recovery, he says—but there’s still risk in markets withoversupply.|