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Europe commercial real estate market 2023-2027: A descriptive analysis of five forces model, market dynamics, and segmentation- Technavio

Europe commercial real estate market 2023-2027: A descriptive analysis of five forces model, market dynamics, and segmentation- Technavio
PR Newswire
NEW YORK, Jan. 17, 2023

NEW YORK, Jan. 17, 2023 /PRNewswire/ — According to Technavio, the Europe…

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Europe commercial real estate market 2023-2027: A descriptive analysis of five forces model, market dynamics, and segmentation- Technavio

PR Newswire

NEW YORK, Jan. 17, 2023 /PRNewswire/ -- According to Technavio, the Europe commercial real estate market size is estimated to grow by USD 80.59 billion from 2022 to 2027. The market is estimated to grow at a CAGR of 5.55% during the forecast period. Moreover, the growth momentum will accelerate.

For more insights on market size, request a sample report

Commercial real estate market in Europe - Five forces
The commercial real estate market in Europe is fragmented, and the five forces analysis covers – 

  • Bargaining power of buyers 
  • The threat of new entrants
  • Threat of rivalry
  • Bargaining power of suppliers
  • Threat of substitutes
  • For interpretation of Porter's five forces model – buy the report!

Commercial real estate market in Europe – Customer landscape 

The report includes the market's adoption lifecycle, from the innovator's stage to the laggard's stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their growth strategies.

Commercial real estate market in Europe - Segmentation assessment

Segment overview
Technavio has segmented the market based on end-user (offices, retail, leisure, and others) and type (rental, lease, and sales). 

  • The offices segment will grow at a significant rate during the forecast period. Office account for 35% of all new jobs created across the world, which will facilitate market growth during the forecast period. Moreover, the demand for office space is expected to increase with the economic expansion and the employment situation. Thus, the growth of the office sector is expected to fuel the demand for commercial real estate in Europe.

Download a sample report

Commercial real estate market in Europe – Market dynamics
Key factor driving market growth

  • The growing aggregate private investment is driving the market growth.
  • Aggregate private sector investment refers to the investment by individuals and firms in tangible assets such as land, commercial buildings, and commercial offices.
  • Investments in business sectors such as land, offices, and other physical structures account for the largest share of total private investment.
  • Most corporate investment is in hardware and software, with the rest spent on physical structures such as buildings, land, and business offices.
  • Growing investments in industries have increased the demand for commercial real estate consulting services that help investors in planning strategies and investments.
  • Thus, with growth in industrialization, a significant rise in the total investments of private companies is expected, which will fuel the growth of the commercial real estate market in Europe during the forecast period.
     

Leading trends influencing the market 

  • Increasing investments in the commercial real estate market in Europe is a key trend in the market.
  • For instance, 23% of companies in Germany plan to increase investments.
  • In the UK, 82% of investors plan to grow their international business
  • In addition, in France, 64% of real estate experts intend to increase their international investments.
  • Similarly, in Spain, 42% of investors intend to become more active internationally.
  • These factors are expected to support market growth during the forecast period.

Major challenges hindering market growth

  • Increasing interest rates are challenging the market growth.
  • Some of the biggest lenders in Europe are dealing with the increasing defaults on commercial real estate.
  • The demand for space in many commercial properties is expected to decrease, which could lower rents.
  • Moreover, the recent sharp increase in interest rates in Europe is driving the cost of debt for landlords.
  • A significant decline in commercial property values can violate the debt covenants included in bank leases, which could potentially lead lenders to foreclose on distressed properties.
  • These factors will impede market growth during the forecast period.

Drivers, trends, and challenges have an impact on market dynamics, which can impact businesses. Find some insights from a sample report!

What are the key data covered in this Europe commercial real estate market report?

  • CAGR of the market during the forecast period
  • Detailed information on factors that will drive the growth of the commercial real estate market in Europe between 2023 and 2027
  • Precise estimation of the size of the commercial real estate market in Europe and its contribution to the parent market
  • Accurate predictions about upcoming trends and changes in consumer behavior
  • A thorough analysis of the market's competitive landscape and detailed information about vendors
  • Comprehensive analysis of factors that will challenge the growth of Europe commercial real estate market vendors

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Related Reports:

The residential real estate market is estimated to grow at a CAGR of 5.07% between 2022 and 2027. The size of the market is forecasted to increase by USD 514.41 billion. This report extensively covers market segmentation by mode of booking (sales and rental/lease), type (apartments, condominiums, landed houses, and villas), and geography (APAC, North America, Europe, South America, and Middle East and Africa).

The commercial real estate market is estimated to grow at a CAGR of 3.3% between 2022 and 2027. The size of the market is forecasted to increase by USD 260.37 billion. This report extensively covers market segmentation by end-user (offices, retail, leisure, and others) and geography (APAC, North America, Europe, Middle East and Africa, and South America).

Europe Commercial Real Estate Market Scope

Report Coverage

Details

Page number

141

Base year

2022

Historic period

2017-2021

Forecast period

2023-2027

Growth momentum & CAGR

Accelerate at a CAGR of 5.55%

Market growth 2023-2027

USD 80.59 billion

Market structure

Fragmented

YoY growth 2022-2023 (%)

5.0

Key countries

Germany, UK, France, Italy, and Rest of Europe

Competitive landscape

Leading vendors, market positioning of vendors, competitive strategies, and industry risks

Key companies profiled

AG Real Estate, Aroundtown SA, Blackstone Inc., BNP Paribas, Covivio, CPI Property Group, Deutsche WohnenDeutsche Wohnen SE, Fastighets AB Baider, Futureal Management Szolgaltato Kft., HB Reavis Group, Jones Lang LaSalle IP, Inc., LEG Immobilien SE, Longfor Group Holdings Ltd., MITSUBISHI ESTATE Co., Ltd., REA group Ltd., Segro Plc, Skanska, STRABAG SE, Tishman Speyer, and Hines

Market dynamics

Parent market analysis, market growth inducers and obstacles, fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, and market condition analysis for the forecast period.

Customization purview

If our report has not included the data that you are looking for, you can reach out to our analysts and get segments customized.

Customization purview

If our report has not included the data that you are looking for, you can reach out to our analysts and get segments customized.

Browse for Technavio's consumer discretionary market reports

Table of contents

1 Executive Summary

  • 1.1 Market overview 
    • Exhibit 01: Executive Summary – Chart on Market Overview
    • Exhibit 02: Executive Summary – Data Table on Market Overview
    • Exhibit 03: Executive Summary – Chart on Country Market Characteristics
    • Exhibit 04: Executive Summary – Chart on Market by Geography
    • Exhibit 05: Executive Summary – Chart on Market Segmentation by End-user
    • Exhibit 06: Executive Summary – Chart on Market Segmentation by Type
    • Exhibit 07: Executive Summary – Chart on Incremental Growth
    • Exhibit 08: Executive Summary – Data Table on Incremental Growth
    • Exhibit 09: Executive Summary – Chart on Vendor Market Positioning

2 Market Landscape

  • 2.1 Market ecosystem 
    • Exhibit 10: Parent market
    • Exhibit 11: Market Characteristics

3 Market Sizing

  • 3.1 Market definition 
    • Exhibit 12: Offerings of vendors included in the market definition
  • 3.2 Market segment analysis 
    • Exhibit 13: Market segments
  • 3.3 Market size 2022
  • 3.4 Market outlook: Forecast for 2022-2027 
    • Exhibit 14: Chart on Europe - Market size and forecast 2022-2027 ($ billion)
    • Exhibit 15: Data Table on Regional - Market size and forecast 2022-2027 ($ billion)
    • Exhibit 16: Chart on Europe: Year-over-year growth 2022-2027 (%)
    • Exhibit 17: Data Table on Regional - Market size and forecast 2022-2027 ($ billion)

4 Historic Market Size

  • 4.1 Commercial real estate market in Europe 2017 - 2021
    • Exhibit 18: Historic Market Size – Data Table on Commercial real estate market in Europe 2017 - 2021 ($ billion)
  • 4.2 End-user Segment Analysis 2017 - 2021 
    • Exhibit 19: Historic Market Size – End-user Segment 2017 - 2021 ($ billion)
  • 4.3 Type Segment Analysis 2017 - 2021 
    • Exhibit 20: Historic Market Size – Type Segment 2017 - 2021 ($ billion)
  • 4.4 Geography Segment Analysis 2017 - 2021 
    • Exhibit 21: Historic Market Size – Geography Segment 2017 - 2021 ($ billion)

5 Five Forces Analysis

  • 5.1 Five forces summary 
    • Exhibit 22: Five forces analysis - Comparison between 2022 and 2027
  • 5.2 Bargaining power of buyers 
    • Exhibit 23: Chart on Bargaining power of buyers – Impact of key factors 2022 and 2027
  • 5.3 Bargaining power of suppliers 
    • Exhibit 24: Bargaining power of suppliers – Impact of key factors in 2022 and 2027
  • 5.4 Threat of new entrants 
    • Exhibit 25: Threat of new entrants – Impact of key factors in 2022 and 2027
  • 5.5 Threat of substitutes 
    • Exhibit 26: Threat of substitutes – Impact of key factors in 2022 and 2027
  • 5.6 Threat of rivalry 
    • Exhibit 27: Threat of rivalry – Impact of key factors in 2022 and 2027
  • 5.7 Market condition 
    • Exhibit 28: Chart on Market condition - Five forces 2022 and 2027

6 Market Segmentation by End-user

  • 6.1 Market segments 
    • Exhibit 29: Chart on End-user - Market share 2022-2027 (%)
    • Exhibit 30: Data Table on End-user - Market share 2022-2027 (%)
  • 6.2 Comparison by End-user 
    • Exhibit 31: Chart on Comparison by End-user
    • Exhibit 32: Data Table on Comparison by End-user
  • 6.3 Offices - Market size and forecast 2022-2027
    • Exhibit 33: Chart on Offices - Market size and forecast 2022-2027 ($ billion)
    • Exhibit 34: Data Table on Offices - Market size and forecast 2022-2027 ($ billion)
    • Exhibit 35: Chart on Offices - Year-over-year growth 2022-2027 (%)
    • Exhibit 36: Data Table on Offices - Year-over-year growth 2022-2027 (%)
  • 6.4 Retail - Market size and forecast 2022-2027 
    • Exhibit 37: Chart on Retail - Market size and forecast 2022-2027 ($ billion)
    • Exhibit 38: Data Table on Retail - Market size and forecast 2022-2027 ($ billion)
    • Exhibit 39: Chart on Retail - Year-over-year growth 2022-2027 (%)
    • Exhibit 40: Data Table on Retail - Year-over-year growth 2022-2027 (%)
  • 6.5 Leisure - Market size and forecast 2022-2027
    • Exhibit 41: Chart on Leisure - Market size and forecast 2022-2027 ($ billion)
    • Exhibit 42: Data Table on Leisure - Market size and forecast 2022-2027 ($ billion)
    • Exhibit 43: Chart on Leisure - Year-over-year growth 2022-2027 (%)
    • Exhibit 44: Data Table on Leisure - Year-over-year growth 2022-2027 (%)
  • 6.6 Others - Market size and forecast 2022-2027
    • Exhibit 45: Chart on Others - Market size and forecast 2022-2027 ($ billion)
    • Exhibit 46: Data Table on Others - Market size and forecast 2022-2027 ($ billion)
    • Exhibit 47: Chart on Others - Year-over-year growth 2022-2027 (%)
    • Exhibit 48: Data Table on Others - Year-over-year growth 2022-2027 (%)
  • 6.7 Market opportunity by End-user 
    • Exhibit 49: Market opportunity by End-user ($ billion)

7 Market Segmentation by Type

  • 7.1 Market segments 
    • Exhibit 50: Chart on Type - Market share 2022-2027 (%)
    • Exhibit 51: Data Table on Type - Market share 2022-2027 (%)
  • 7.2 Comparison by Type 
    • Exhibit 52: Chart on Comparison by Type
    • Exhibit 53: Data Table on Comparison by Type
  • 7.3 Rental - Market size and forecast 2022-2027
    • Exhibit 54: Chart on Rental - Market size and forecast 2022-2027 ($ billion)
    • Exhibit 55: Data Table on Rental - Market size and forecast 2022-2027 ($ billion)
    • Exhibit 56: Chart on Rental - Year-over-year growth 2022-2027 (%)
    • Exhibit 57: Data Table on Rental - Year-over-year growth 2022-2027 (%)
  • 7.4 Lease - Market size and forecast 2022-2027
    • Exhibit 58: Chart on Lease - Market size and forecast 2022-2027 ($ billion)
    • Exhibit 59: Data Table on Lease - Market size and forecast 2022-2027 ($ billion)
    • Exhibit 60: Chart on Lease - Year-over-year growth 2022-2027 (%)
    • Exhibit 61: Data Table on Lease - Year-over-year growth 2022-2027 (%)
  • 7.5 Sales - Market size and forecast 2022-2027
    • Exhibit 62: Chart on Sales - Market size and forecast 2022-2027 ($ billion)
    • Exhibit 63: Data Table on Sales - Market size and forecast 2022-2027 ($ billion)
    • Exhibit 64: Chart on Sales - Year-over-year growth 2022-2027 (%)
    • Exhibit 65: Data Table on Sales - Year-over-year growth 2022-2027 (%)
  • 7.6 Market opportunity by Type 
    • Exhibit 66: Market opportunity by Type ($ billion)

8 Customer Landscape

  • 8.1 Customer landscape overview 
    • Exhibit 67: Analysis of price sensitivity, lifecycle, customer purchase basket, adoption rates, and purchase criteria

9 Geographic Landscape

  • 9.1 Geographic segmentation 
    • Exhibit 68: Chart on Market share by geography - 2022-2027 (%)
    • Exhibit 69: Data Table on Market share by geography - 2022-2027 (%)
  • 9.2 Geographic comparison 
    • Exhibit 70: Chart on Geographic comparison
    • Exhibit 71: Data Table on Geographic comparison
  • 9.3 Germany - Market size and forecast 2022-2027
    • Exhibit 72: Chart on Germany - Market size and forecast 2022-2027 ($ billion)
    • Exhibit 73: Data Table on Germany - Market size and forecast 2022-2027 ($ billion)
    • Exhibit 74: Chart on Germany - Year-over-year growth 2022-2027 (%)
    • Exhibit 75: Data Table on Germany - Year-over-year growth 2022-2027 (%)
  • 9.4 UK - Market size and forecast 2022-2027
    • Exhibit 76: Chart on UK - Market size and forecast 2022-2027 ($ billion)
    • Exhibit 77: Data Table on UK - Market size and forecast 2022-2027 ($ billion)
    • Exhibit 78: Chart on UK - Year-over-year growth 2022-2027 (%)
    • Exhibit 79: Data Table on UK - Year-over-year growth 2022-2027 (%)
  • 9.5 France - Market size and forecast 2022-2027
    • Exhibit 80: Chart on France - Market size and forecast 2022-2027 ($ billion)
    • Exhibit 81: Data Table on France - Market size and forecast 2022-2027 ($ billion)
    • Exhibit 82: Chart on France - Year-over-year growth 2022-2027 (%)
    • Exhibit 83: Data Table on France - Year-over-year growth 2022-2027 (%)
  • 9.6 Italy - Market size and forecast 2022-2027
    • Exhibit 84: Chart on Italy - Market size and forecast 2022-2027 ($ billion)
    • Exhibit 85: Data Table on Italy - Market size and forecast 2022-2027 ($ billion)
    • Exhibit 86: Chart on Italy - Year-over-year growth 2022-2027 (%)
    • Exhibit 87: Data Table on Italy - Year-over-year growth 2022-2027 (%)
  • 9.7 Rest of Europe - Market size and forecast 2022-2027
    • Exhibit 88: Chart on Rest of Europe - Market size and forecast 2022-2027 ($ billion)
    • Exhibit 89: Data Table on Rest of Europe - Market size and forecast 2022-2027 ($ billion)
    • Exhibit 90: Chart on Rest of Europe - Year-over-year growth 2022-2027 (%)
    • Exhibit 91: Data Table on Rest of Europe - Year-over-year growth 2022-2027 (%)
  • 9.8 Market opportunity by geography 
    • Exhibit 92: Market opportunity by geography ($ billion)

10 Drivers, Challenges, and Trends

  • 10.1 Market drivers
  • 10.2 Market challenges
  • 10.3 Impact of drivers and challenges 
    • Exhibit 93: Impact of drivers and challenges in 2022 and 2027
  • 10.4 Market trends

11 Vendor Landscape

  • 11.1 Overview
  • 11.2 Vendor landscape 
    • Exhibit 94: Overview on Criticality of inputs and Factors of differentiation
  • 11.3 Landscape disruption 
    • Exhibit 95: Overview on factors of disruption
  • 11.4 Industry risks 
    • Exhibit 96: Impact of key risks on business

12 Vendor Analysis

  • 12.1 Vendors covered 
    • Exhibit 97: Vendors covered
  • 12.2 Market positioning of vendors 
    • Exhibit 98: Matrix on vendor position and classification
  • 12.3 AG Real Estate 
    • Exhibit 99: AG Real Estate - Overview
    • Exhibit 100: AG Real Estate - Product / Service
    • Exhibit 101: AG Real Estate - Key offerings
  • 12.4 Blackstone Inc. 
    • Exhibit 102: Blackstone Inc. - Overview
    • Exhibit 103: Blackstone Inc. - Business segments
    • Exhibit 104: Blackstone Inc. - Key news
    • Exhibit 105: Blackstone Inc. - Key offerings
    • Exhibit 106: Blackstone Inc. - Segment focus
  • 12.5 BNP Paribas 
    • Exhibit 107: BNP Paribas - Overview
    • Exhibit 108: BNP Paribas - Product / Service
    • Exhibit 109: BNP Paribas - Key offerings
  • 12.6 Covivio 
    • Exhibit 110: Covivio - Overview
    • Exhibit 111: Covivio - Product / Service
    • Exhibit 112: Covivio - Key offerings
  • 12.7 Deutsche WohnenDeutsche Wohnen SE 
    • Exhibit 113: Deutsche WohnenDeutsche Wohnen SE - Overview
    • Exhibit 114: Deutsche WohnenDeutsche Wohnen SE - Product / Service
    • Exhibit 115: Deutsche WohnenDeutsche Wohnen SE - Key offerings
  • 12.8 Fastighets AB Baider 
    • Exhibit 116: Fastighets AB Baider - Overview
    • Exhibit 117: Fastighets AB Baider - Product / Service
    • Exhibit 118: Fastighets AB Baider - Key offerings
  • 12.9 Futureal Management Szolgaltato Kft. 
    • Exhibit 119: Futureal Management Szolgaltato Kft. - Overview
    • Exhibit 120: Futureal Management Szolgaltato Kft. - Product / Service
    • Exhibit 121: Futureal Management Szolgaltato Kft. - Key offerings
  • 12.10 HB Reavis Group 
    • Exhibit 122: HB Reavis Group - Overview
    • Exhibit 123: HB Reavis Group - Product / Service
    • Exhibit 124: HB Reavis Group - Key offerings
  • 12.11 Hines 
    • Exhibit 125: Hines - Overview
    • Exhibit 126: Hines - Product / Service
    • Exhibit 127: Hines - Key offerings
  • 12.12 MITSUBISHI ESTATE Co., Ltd. 
    • Exhibit 128: MITSUBISHI ESTATE Co., Ltd. - Overview
    • Exhibit 129: MITSUBISHI ESTATE Co., Ltd. - Product / Service
    • Exhibit 130: MITSUBISHI ESTATE Co., Ltd. - Key offerings
  • 12.13 REA group Ltd. 
    • Exhibit 131: REA group Ltd. - Overview
    • Exhibit 132: REA group Ltd. - Product / Service
    • Exhibit 133: REA group Ltd. - Key offerings
  • 12.14 Segro Plc 
    • Exhibit 134: Segro Plc - Overview
    • Exhibit 135: Segro Plc - Business segments
    • Exhibit 136: Segro Plc - Key offerings
    • Exhibit 137: Segro Plc - Segment focus
  • 12.15 Skanska 
    • Exhibit 138: Skanska - Overview
    • Exhibit 139: Skanska - Product / Service
    • Exhibit 140: Skanska - Key offerings
  • 12.16 STRABAG SE 
    • Exhibit 141: STRABAG SE - Overview
    • Exhibit 142: STRABAG SE - Business segments
    • Exhibit 143: STRABAG SE - Key news
    • Exhibit 144: STRABAG SE - Key offerings
    • Exhibit 145: STRABAG SE - Segment focus
  • 12.17 Tishman Speyer 
    • Exhibit 146: Tishman Speyer - Overview
    • Exhibit 147: Tishman Speyer - Product / Service
    • Exhibit 148: Tishman Speyer - Key offerings

13 Appendix

  • 13.1 Scope of the report
  • 13.2 Inclusions and exclusions checklist 
    • Exhibit 149: Inclusions checklist
    • Exhibit 150: Exclusions checklist
  • 13.3 Currency conversion rates for US$ 
    • Exhibit 151: Currency conversion rates for US$
  • 13.4 Research methodology 
    • Exhibit 152: Research methodology
    • Exhibit 153: Validation techniques employed for market sizing
    • Exhibit 154: Information sources
  • 13.5 List of abbreviations 
    • Exhibit 155: List of abbreviations

About Us

Technavio is a leading global technology research and advisory company. Their research and analysis focus on emerging market trends and provide actionable insights to help businesses identify market opportunities and develop effective strategies to optimize their market positions. With over 500 specialized analysts, Technavio's report library consists of more than 17,000 reports and counting, covering 800 technologies, spanning across 50 countries. Their client base consists of enterprises of all sizes, including more than 100 Fortune 500 companies. This growing client base relies on Technavio's comprehensive coverage, extensive research, and actionable market insights to identify opportunities in existing and potential markets and assess their competitive positions within changing market scenarios.

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Email: media@technavio.com
Website: www.technavio.com/

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Aging at AACR Annual Meeting 2024

BUFFALO, NY- March 11, 2024 – Impact Journals publishes scholarly journals in the biomedical sciences with a focus on all areas of cancer and aging…

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BUFFALO, NY- March 11, 2024 – Impact Journals publishes scholarly journals in the biomedical sciences with a focus on all areas of cancer and aging research. Aging is one of the most prominent journals published by Impact Journals

Credit: Impact Journals

BUFFALO, NY- March 11, 2024 – Impact Journals publishes scholarly journals in the biomedical sciences with a focus on all areas of cancer and aging research. Aging is one of the most prominent journals published by Impact Journals

Impact Journals will be participating as an exhibitor at the American Association for Cancer Research (AACR) Annual Meeting 2024 from April 5-10 at the San Diego Convention Center in San Diego, California. This year, the AACR meeting theme is “Inspiring Science • Fueling Progress • Revolutionizing Care.”

Visit booth #4159 at the AACR Annual Meeting 2024 to connect with members of the Aging team.

About Aging-US:

Aging publishes research papers in all fields of aging research including but not limited, aging from yeast to mammals, cellular senescence, age-related diseases such as cancer and Alzheimer’s diseases and their prevention and treatment, anti-aging strategies and drug development and especially the role of signal transduction pathways such as mTOR in aging and potential approaches to modulate these signaling pathways to extend lifespan. The journal aims to promote treatment of age-related diseases by slowing down aging, validation of anti-aging drugs by treating age-related diseases, prevention of cancer by inhibiting aging. Cancer and COVID-19 are age-related diseases.

Aging is indexed and archived by PubMed/Medline (abbreviated as “Aging (Albany NY)”), PubMed CentralWeb of Science: Science Citation Index Expanded (abbreviated as “Aging‐US” and listed in the Cell Biology and Geriatrics & Gerontology categories), Scopus (abbreviated as “Aging” and listed in the Cell Biology and Aging categories), Biological Abstracts, BIOSIS Previews, EMBASE, META (Chan Zuckerberg Initiative) (2018-2022), and Dimensions (Digital Science).

Please visit our website at www.Aging-US.com​​ and connect with us:

  • Aging X
  • Aging Facebook
  • Aging Instagram
  • Aging YouTube
  • Aging LinkedIn
  • Aging SoundCloud
  • Aging Pinterest
  • Aging Reddit

Click here to subscribe to Aging publication updates.

For media inquiries, please contact media@impactjournals.com.


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NY Fed Finds Medium, Long-Term Inflation Expectations Jump Amid Surge In Stock Market Optimism

NY Fed Finds Medium, Long-Term Inflation Expectations Jump Amid Surge In Stock Market Optimism

One month after the inflation outlook tracked…

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NY Fed Finds Medium, Long-Term Inflation Expectations Jump Amid Surge In Stock Market Optimism

One month after the inflation outlook tracked by the NY Fed Consumer Survey extended their late 2023 slide, with 3Y inflation expectations in January sliding to a record low 2.4% (from 2.6% in December), even as 1 and 5Y inflation forecasts remained flat, moments ago the NY Fed reported that in February there was a sharp rebound in longer-term inflation expectations, rising to 2.7% from 2.4% at the three-year ahead horizon, and jumping to 2.9% from 2.5% at the five-year ahead horizon, while the 1Y inflation outlook was flat for the 3rd month in a row, stuck at 3.0%. 

The increases in both the three-year ahead and five-year ahead measures were most pronounced for respondents with at most high school degrees (in other words, the "really smart folks" are expecting deflation soon). The survey’s measure of disagreement across respondents (the difference between the 75th and 25th percentile of inflation expectations) decreased at all horizons, while the median inflation uncertainty—or the uncertainty expressed regarding future inflation outcomes—declined at the one- and three-year ahead horizons and remained unchanged at the five-year ahead horizon.

Going down the survey, we find that the median year-ahead expected price changes increased by 0.1 percentage point to 4.3% for gas; decreased by 1.8 percentage points to 6.8% for the cost of medical care (its lowest reading since September 2020); decreased by 0.1 percentage point to 5.8% for the cost of a college education; and surprisingly decreased by 0.3 percentage point for rent to 6.1% (its lowest reading since December 2020), and remained flat for food at 4.9%.

We find the rent expectations surprising because it is happening just asking rents are rising across the country.

At the same time as consumers erroneously saw sharply lower rents, median home price growth expectations remained unchanged for the fifth consecutive month at 3.0%.

Turning to the labor market, the survey found that the average perceived likelihood of voluntary and involuntary job separations increased, while the perceived likelihood of finding a job (in the event of a job loss) declined. "The mean probability of leaving one’s job voluntarily in the next 12 months also increased, by 1.8 percentage points to 19.5%."

Mean unemployment expectations - or the mean probability that the U.S. unemployment rate will be higher one year from now - decreased by 1.1 percentage points to 36.1%, the lowest reading since February 2022. Additionally, the median one-year-ahead expected earnings growth was unchanged at 2.8%, remaining slightly below its 12-month trailing average of 2.9%.

Turning to household finance, we find the following:

  • The median expected growth in household income remained unchanged at 3.1%. The series has been moving within a narrow range of 2.9% to 3.3% since January 2023, and remains above the February 2020 pre-pandemic level of 2.7%.
  • Median household spending growth expectations increased by 0.2 percentage point to 5.2%. The increase was driven by respondents with a high school degree or less.
  • Median year-ahead expected growth in government debt increased to 9.3% from 8.9%.
  • The mean perceived probability that the average interest rate on saving accounts will be higher in 12 months increased by 0.6 percentage point to 26.1%, remaining below its 12-month trailing average of 30%.
  • Perceptions about households’ current financial situations deteriorated somewhat with fewer respondents reporting being better off than a year ago. Year-ahead expectations also deteriorated marginally with a smaller share of respondents expecting to be better off and a slightly larger share of respondents expecting to be worse off a year from now.
  • The mean perceived probability that U.S. stock prices will be higher 12 months from now increased by 1.4 percentage point to 38.9%.
  • At the same time, perceptions and expectations about credit access turned less optimistic: "Perceptions of credit access compared to a year ago deteriorated with a larger share of respondents reporting tighter conditions and a smaller share reporting looser conditions compared to a year ago."

Also, a smaller percentage of consumers, 11.45% vs 12.14% in prior month, expect to not be able to make minimum debt payment over the next three months

Last, and perhaps most humorous, is the now traditional cognitive dissonance one observes with these polls, because at a time when long-term inflation expectations jumped, which clearly suggests that financial conditions will need to be tightened, the number of respondents expecting higher stock prices one year from today jumped to the highest since November 2021... which incidentally is just when the market topped out during the last cycle before suffering a painful bear market.

Tyler Durden Mon, 03/11/2024 - 12:40

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Homes listed for sale in early June sell for $7,700 more

New Zillow research suggests the spring home shopping season may see a second wave this summer if mortgage rates fall
The post Homes listed for sale in…

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  • A Zillow analysis of 2023 home sales finds homes listed in the first two weeks of June sold for 2.3% more. 
  • The best time to list a home for sale is a month later than it was in 2019, likely driven by mortgage rates.
  • The best time to list can be as early as the second half of February in San Francisco, and as late as the first half of July in New York and Philadelphia. 

Spring home sellers looking to maximize their sale price may want to wait it out and list their home for sale in the first half of June. A new Zillow® analysis of 2023 sales found that homes listed in the first two weeks of June sold for 2.3% more, a $7,700 boost on a typical U.S. home.  

The best time to list consistently had been early May in the years leading up to the pandemic. The shift to June suggests mortgage rates are strongly influencing demand on top of the usual seasonality that brings buyers to the market in the spring. This home-shopping season is poised to follow a similar pattern as that in 2023, with the potential for a second wave if the Federal Reserve lowers interest rates midyear or later. 

The 2.3% sale price premium registered last June followed the first spring in more than 15 years with mortgage rates over 6% on a 30-year fixed-rate loan. The high rates put home buyers on the back foot, and as rates continued upward through May, they were still reassessing and less likely to bid boldly. In June, however, rates pulled back a little from 6.79% to 6.67%, which likely presented an opportunity for determined buyers heading into summer. More buyers understood their market position and could afford to transact, boosting competition and sale prices.

The old logic was that sellers could earn a premium by listing in late spring, when search activity hit its peak. Now, with persistently low inventory, mortgage rate fluctuations make their own seasonality. First-time home buyers who are on the edge of qualifying for a home loan may dip in and out of the market, depending on what’s happening with rates. It is almost certain the Federal Reserve will push back any interest-rate cuts to mid-2024 at the earliest. If mortgage rates follow, that could bring another surge of buyers later this year.

Mortgage rates have been impacting affordability and sale prices since they began rising rapidly two years ago. In 2022, sellers nationwide saw the highest sale premium when they listed their home in late March, right before rates barreled past 5% and continued climbing. 

Zillow’s research finds the best time to list can vary widely by metropolitan area. In 2023, it was as early as the second half of February in San Francisco, and as late as the first half of July in New York. Thirty of the top 35 largest metro areas saw for-sale listings command the highest sale prices between May and early July last year. 

Zillow also found a wide range in the sale price premiums associated with homes listed during those peak periods. At the hottest time of the year in San Jose, homes sold for 5.5% more, a $88,000 boost on a typical home. Meanwhile, homes in San Antonio sold for 1.9% more during that same time period.  

 

Metropolitan Area Best Time to List Price Premium Dollar Boost
United States First half of June 2.3% $7,700
New York, NY First half of July 2.4% $15,500
Los Angeles, CA First half of May 4.1% $39,300
Chicago, IL First half of June 2.8% $8,800
Dallas, TX First half of June 2.5% $9,200
Houston, TX Second half of April 2.0% $6,200
Washington, DC Second half of June 2.2% $12,700
Philadelphia, PA First half of July 2.4% $8,200
Miami, FL First half of June 2.3% $12,900
Atlanta, GA Second half of June 2.3% $8,700
Boston, MA Second half of May 3.5% $23,600
Phoenix, AZ First half of June 3.2% $14,700
San Francisco, CA Second half of February 4.2% $50,300
Riverside, CA First half of May 2.7% $15,600
Detroit, MI First half of July 3.3% $7,900
Seattle, WA First half of June 4.3% $31,500
Minneapolis, MN Second half of May 3.7% $13,400
San Diego, CA Second half of April 3.1% $29,600
Tampa, FL Second half of June 2.1% $8,000
Denver, CO Second half of May 2.9% $16,900
Baltimore, MD First half of July 2.2% $8,200
St. Louis, MO First half of June 2.9% $7,000
Orlando, FL First half of June 2.2% $8,700
Charlotte, NC Second half of May 3.0% $11,000
San Antonio, TX First half of June 1.9% $5,400
Portland, OR Second half of April 2.6% $14,300
Sacramento, CA First half of June 3.2% $17,900
Pittsburgh, PA Second half of June 2.3% $4,700
Cincinnati, OH Second half of April 2.7% $7,500
Austin, TX Second half of May 2.8% $12,600
Las Vegas, NV First half of June 3.4% $14,600
Kansas City, MO Second half of May 2.5% $7,300
Columbus, OH Second half of June 3.3% $10,400
Indianapolis, IN First half of July 3.0% $8,100
Cleveland, OH First half of July  3.4% $7,400
San Jose, CA First half of June 5.5% $88,400

 

The post Homes listed for sale in early June sell for $7,700 more appeared first on Zillow Research.

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