As states and cities across the U.S. ease pandemic-induced restrictions, economists believe much of the pent-up demand and consumer savings during the pandemic will be pumped into the economy in 2021. As a result, a commercial economic boom may also be on the horizon, according to reports from speakers at the Commercial Economic Issues and Trends Forum, held as part of the 2021 REALTORS Legislative Meetings & Trade Expo.
"Economic expansion and the jobs recovery will lead to rises in occupancy across all commercial real estate property types," said Lawrence Yun, chief economist at the National Association of Realtors. "However, overall consumer price inflation is expected to increase 3% by the end of 2021 and likely will stay stubbornly high through next year, which will increase interest rates to 3.5%."
Yun also believes that the apartment and rental markets will regain footing in line with the recovery of the broader national economy and more specifically, urban areas across the country.
"The apartment sector underwent sudden swings in occupancy — down abruptly in the early months of the pandemic and then sharply rebounding in recent months — but we expect vacancy to drop and rents to rise," said Yun. "The industrial sector has been the star throughout the pandemic. There's been great demand for industrial space, and reconversion of some disused properties like older shopping malls can help meet this demand."
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