On November 24, 2015 the National Association of Realtors released its Q4 2015 Commercial Real Estate Outlook. Some of the highlights noted in the report are as follows:
Real Estate Statistics Through Q3 of 2015
- Gross Domestic Product (GDP) rose at an annual rate of 1.5% for the third quarter 2015 compared to 4.3% for the third quarter 2014.
- 501,000 new jobs were added during the third quarter of 2015, bringing the year-to-date total to 1.8 million.
- Average weekly earnings of private employees – adjusted for inflation – rose by 2.3% in the third quarter.
- The unemployment rate declined from an average of 5.4% in the second quarter of 2015 to 5.1% in the third quarter.
- The volume of commercial sales in large buildings market (larger than 17,000 square feet) through the third quarter of 2015 has increased by 3.0% over the same period for 2014.
- Prices in the large building market rose 14.2% during the third quarter of 2015 from the second quarter of 2015.
- The volume of commercial sales in the small building market (smaller than 17,000 square feet) increased 7.0% from the third quarter of 2014.
- The average selling prices in the small building market decreased approximately 5.0% from the second quarter of 2015 to the third quarter of 2015.
Real Estate Projections for Q4 and Into 2016
- The GDP annual rate of growth is projected to reach 2.0% in the fourth quarter and increase in the first half of 2016 to around 2.5%.
- Unemployment is projected to fall to 4.9% during 2016.
- Payroll employment is projected to be around a 1.7% annual growth rate for the fourth quarter of 2015 and into 2016.
- Inflation is projected to be 1.5% during the fourth quarter of 2015 and is expected to increase to around 3.2% during 2016.
- Commercial property vacancies are expected to continue a downward trend and are projected to average 15.6% by the end of 2015 and decline to 14.9% in 2016 with similar trends for industrial and retail property vacancies.
- Sales volume for the large building market is expected to remain consistent from 2015 to 2016, while property prices are expected to decline slightly in 2016.