Higher for longer; housing permits jump; consumer demand shows cracks

On this week’s CRE Exchange, Cole Perry, Senior Market Analyst, and Omar Eltorai, Director of Research, both of Altus Group, tackle FOMC’s decision on rates, current trajectories for building permits and home starts, potential consumer demand signals from four recent earnings reports, WP Carey’s shift in investments, Airbnb’s predicament with NYC’s Local Law 18, looming threats of a government shutdown and a sneak peek into critical upcoming market indicators.

Key Takeaways:

[00:55] Latest news from the FOMC: Rates hold, but expectations of higher for longer persist.

[03:18] US and Canada housing starts and building permits diverge — is it a blip or just a lag?

[06:27] KB Homes’ earnings report confirms a tough environment for home sales but a silver lining around consumer attitudes toward smaller homes.

[10:51] Three major companies, three indications of weakening consumer demand.

[16:12] WP Carey’s Investment Evolution: WP Carey plans to exit office spaces and reallocate investments into essential retail, industrial warehouses and self-storage assets. They introduce the Net Lease Office Properties REIT.

[18:41]The Airbnb Challenge in NYC: NYC experienced a 77% drop in Airbnb listings due to Local Law 18, potentially reviving the traditional hotel sector in Manhattan and providing other major cities with a glimpse into how similar laws could impact their short-term rental markets.

[21:37]  Implications of a Government Shutdown: Apprehensions and discussions concerning a looming shutdown, potentially disrupting crucial economic metrics.

[22:56] Market Pulse: Upcoming market indicators and corporate earnings calls, such as Costco, CarMax, and Carnival Cruise Lines, offer insights into evolving market trends.

Resources Mentioned:

Cole Perry -

https://www.linkedin.com/in/coleperry1/

Omar Eltorai -

https://www.linkedin.com/in/omareltorai/

Altus Group -

https://www.linkedin.com/company/altus-group/

Financial reports from WP Carey -

https://s29.q4cdn.com/223055717/files/doc_earnings/2023/q2/earnings-result/W-P-Carey-Inc-Announces-Second-Quarter-2023-Financial-Results.pdf

Local Law 18’s impact on Airbnb listings -

https://therealdeal.com/new-york/2023/06/13/nyc-postpones-enforcing-short-term-rental-law/

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