Seattle Market Is Strong, But Political Concerns Could Mean Recession
Seattle continued to emerge as an internationally recognized gateway city in 2018, despite Seattle City Council’s head-tax scare. Thanks in part to the city’s growing technology sector, the commercial real estate industry continued to benefit from high demand for office space.
The question is, how long can these good times last?
Last year Callahan predicted that the city would continue to enjoy economic prosperity, but cautioned that extreme political populism could develop into trouble.
“What had me concerned last year still has me concerned today,” Callahan said. “There are still a lot of heated discussions about trade policy and conflicts with trading partners around the world.
“Trade wars, in particular, can cause recessions and more.”
He continues to push for political moderation, rather than polarization. He feels that policies that are too conservative or liberal tend to hurt the economy.
Nationally, fear of recession is starting to develop. At the event, Callahan plans to compare and contrast Seattle’s current economic state with how it was during the past four recessions in terms of trade wars and interest rates.
“That can tell us a lot about where we stand today,” he said. “Is Seattle insulated? I would say we are insulated in some ways.”
Technology has become a driver in the regional economy, and that wasn’t always the case. When the region was mostly manufacturing, it was more susceptible to outside policy forces.
It is important to note that Seattle fully recovered from the last recession, and some parts of the country never did, Callahan said.
A bright spot for Seattle is office space absorption, which he feels is a good indication of where the local market is headed.
“We are at historic highs by every measure you can think of: absorption, rental rates, purchase price, land and assets,” he said.
Hear more from Callahan and other expert speakers at the Bisnow 2019 Seattle Forecast event Jan. 23 at The Four Seasons.