CNBC Features Marcus & Millichap CEO Hessam Nadji Real Estate Market Outlook; Key Opportunities and Investor Considerations in High Inflation Climate Inflation A range of forces continue to sustain apartment housing demand How elevated inflation could be a tailwind for real estate investors Which property segments are positioned to outperform?

Dual factors lift sales. Accelerated hiring and lower prices at the gas pump aided spending in July, with core retail sales now up 29 percent relative to pre-pandemic. The addition of 528,000 positions last month pushed the U.S. employment base beyond the previous February 2020 level, while the Consumer Price Index was unchanged on a month-over-month basis, aided by a 7.7 percent decrease in gas prices. These factors helped offset the impacts of historically low… Read More

Inflation trend may be turning corner. The headline Consumer Price Index in July was up 8.5 percent compared to a year prior, a deceleration from the 9.1 percent year-over-year jump recorded in June. This slowdown was driven predominantly by a month-over-month decline in energy prices, led by a 7.7 percent drop in the gas price component of the index. The costs of other items, most notably food, continued to rise however. Setting aside energy and… Read More

Hiring accelerates in July, underscoring labor market strength. Concerns over the economy’s trajectory, following the reporting of GDP contractions in the first two quarters, may be somewhat assuaged by the robust jobs figures posted for July. Last month employers created 528,000 positions, the second-highest total for the year and a 32 percent increase over hiring in June. These new hires bring the total employment base back to the February 2020 level, with additional private sector… Read More

GDP contracts, but other economic indicators in the green. Real gross domestic product declined at an annualized rate of 0.9 percent in the second quarter, following the 1.6 percent decrease posted in the opening three months of the year. While two consecutive quarters of falling GDP is considered by some to be the technical signal for a recession, the actual state of the economy is more complex. The April to June GDP drop was predominantly… Read More

Sales indicative of transitionary period. Consumers continue to spend more than they did before the health crisis, with core retail sales in June up nearly 27 percent relative to pre-pandemic. Potential oncoming headwinds are starting to emerge, however, which is shifting shopping preferences. Last month, inflation surged 9.1 percent year-over-year as food prices rose 10.4 percent annually. This escalation is weighing on consumer confidence, which fell to its lowest level since February 2021, and shifting… Read More

High inflation persists, but pressure may ease. The Consumer Price Index advanced 9.1 percent year-over-year in June, its fastest pace since November 1981. Accelerated inflation was predominantly driven by higher energy and food prices. Excluding those two categories, core CPI inflation was 5.9 percent last month, a slowdown from the March high of 6.5 percent. While a widespread shortage of raw materials, finished goods and labor continue to push up prices, some relief may be… Read More

Possible recession predictor lit up this month. In early July, the spread between the two-year and 10-year treasuries inverted, with the yield on the shorter-term instrument inching above that of the long-term note. Typically, bonds with longer maturities pay a higher interest rate to compensate investors for the risk of holding those assets longer. When yields invert, it implies investors perceive more economic risk in the near future than down the line. Six of the… Read More

Job growth continues at consistent, above-average pace. Employers added 372,000 personnel to payrolls in June, bringing the total job count to within 0.4 percent of the February 2020 high. June marked the fourth consecutive month with an unemployment rate of 3.6 percent and job creation in the high-300,000 range. While last month’s hiring trails measures from earlier in the year, it is nevertheless well above other periods of tight unemployment. Encouragingly, robust employment growth is… Read More

Fed executes steepest rate hike in decades. At its June 15 meeting, the Federal Open Market Committee (FOMC) raised the federal funds rate 75 basis points to a target range of 1.50 percent to 1.75 percent. This was the largest single increase since November 1994 and brings the total year-to-date advancement to 150 basis points. Additional rate hikes are anticipated through the rest of the year, likely lifting the year-end target range into the 3.50… Read More