Member Perspectives: March 2021

Our member survey reveals a slightly improving outlook from fourth quarter 2020 to first quarter 2021. Events of early last year introduced tremendous uncertainty into the real estate markets and the overall economy. Despite widespread reports of very challenging individual cases, the overall market seemed cautious yet encouraged about the future.

Initiating a survey nine months into a pandemic might have yielded results with a very pessimistic outlook. Instead, the results of our market survey indicated that market participants, primarily in Florida, held a balanced expectation with a generally Stable central tendency. As we turned the year into 2021, the outlook improved toward Strong, away from Weak. The most frequent response was Stable during both quarters, but the weight of responses noticeably shifted toward the positive in the most recent period.

Outlook

Along with the positively shifting outlook, more members expect to conduct More business in the coming year than during the past year. The current assessment of capital availability is similar from quarter to quarter with the same rising momentum. However, each form of capital is viewed differently. Equity capital appears to be widely available with 20% of the first quarter respondents labeling it Excessive. Debt capital, on the other hand, appears to be more limited even though there was a positive shift between the two quarters and the majority of respondents view it as Stable.

One point on which there is widespread agreement is in the identification of the strong and weak sectors. With a high level of consistency, the Multifamily and Industrial sectors are seen as the ones with the best opportunities over the near-term future. The Office and Retail sectors appear to be the most challenged at this point. Of course, in our competitive market, prices are also set by this widely agreed-upon condition. Despite the difference in sector outlooks, there are opportunities and risks in every investment.