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2013 ULI Trends Day Arizona Recap – Part 3 – Economists Panel

Following the Apartment Panel was the Economists. Key characters from this group were: Elliot Pollack, Elliot D Pollack Company; John Lucking, Econ-Linc; moderated by John Graham, Sunbelt Holdings.

According to the economists, we are in “recovery” mode. It is just a very slow recovery.

Here are a few of the bullet points:

  • Consumers have deleveraged – Wealth Effect is becoming more significant
  • Stock Market has recovered – back to the Peak
  • Housing has started the recovery process
  • Business Balance Sheets are strong but their confidence level is “cautious”
  • One number to watch is Employment Growth

What are the Black/Grey/White Swans that could concern the Recovery?

  • Currency Wars are a real concern
  • Maybe we will get luck and the stimulus will kick in?
  • 2013 – the “Groundhog” Year – similar to 2012 in terms of GDP
  • Fiscal Cliff
  • Obamacare
  • We lost 234K jobs and have only recovered 96K so far
  • Phoenix Metro is 3rd out of 25 for Major Employment markets in USA.

Housing still has a long way to go:

  • It is estimated that 22% of the current housing inventory is rentals
  • 40-45% of potential buyers are out of the market
  • Pent up demand is the age bracket of 25-35 year olds
  • Did not anticipate the investor to absorb as much of the Housing as it did

2016 should be the year we would start to see Office construction begin.

Final thoughts:

  • Glass is now ½ FULL
  • 2015 will be a good year in Arizona

Overall, Elliot always has a quick wit and entertaining slideshow presentation to talk about sometimes some of the most boring facts. But, they are the facts. If you are there, what did you takeaway?