Intelligent Investment
U.S. Real Estate Market Outlook 2024
Slowly Falling Interest Rates Should Boost Investment Activity
diciembre 12, 2023 55 Minute Read
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U.S. Real Estate Market Outlook 2024 Event Recording
Executive Summary
- There is an increased chance that the U.S. will avoid a recession and achieve a soft economic landing in 2024, but economic growth will slow and downside risks are elevated.
- Commercial real estate investment activity likely will begin to pick up in the second half of 2024.
- The normalization of hybrid working arrangements will continue to limit the growth of office demand.
- Retail real estate fundamentals are expected to remain strong due to the scarcity of new construction deliveries over the past decade.
- The industrial market is expected to remain healthy, with net absorption on par with 2023 levels.
- The biggest wave of new apartment supply in decades will temper rent growth and improve affordability for renters in 2024.
- The hotel industry will face headwinds to RevPAR growth in 2024, including competition from alternative lodging sources and a slower economy, but fewer Americans traveling internationally will benefit the domestic market.
- Demand for new data center development will attract more institutional investment in 2024, as investors reallocate capital from the office sector to real estate alternatives.
Opportunity Amid Uncertainty in 2024
Compelling opportunities will emerge for commercial real estate investors in 2024, as high interest rates and an economic slowdown—perhaps even a mild recession—lead to bargain pricing for certain assets.
Secondary office assets have already seen sharply lower pricing due to rising vacancies, as hybrid working arrangements now appear permanent. Once interest rates begin to fall and inflation eases further, rehabilitation or conversion of underperforming office buildings to other uses will become more attractive and financially viable. This process will receive substantially more state and local government aid in 2024.
CBRE Research stands ready to help clients succeed in 2024. Please contact us at any time.
Richard Barkham
Global Chief Economist & Global Head of Research
Research Leadership
Contacts
Darin Mellott
Vice President, Head of U.S. Capital Markets Research, CBRE
James Breeze
Vice President, Global Industrial and Retail Research
Matt Vance
Vice President and Americas Head of Multifamily Research
Rachael Rothman, CFA, ISHC
Head of Hotels Research & Data Analytics
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