2025 US Real Estate Outlook
Forecasters expect positive US commercial real estate capital appreciation in 2025 after two years of negatives signifying a cyclical turning point. The improvement is supported by ongoing solid US economic growth, near-target inflation and lower interest rates. Property sector fundamentals are positive as well except for the ongoing challenges in the office sector.
Risk to this forecast is heightened, however, due to the possibility that the new Trump administration will implement policies that boost inflation and shrink growth prospects while boosting financial market volatility.
Reflecting these possibilities, property investors might prolong their due diligence as they assess opportunities for cyclically attractive purchases. Property sectors and metro markets with relatively more constrained supply and durable demand will be least affected by heightened uncertainty.
On a positive note, prolonged due diligence processes could prolong access to cyclically attractive property prices. Overall, long-horizon investors will have an advantage in the 2025 environment if they focus on the inherent strength in the US economy.
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