Recovery in sight?

Real Estate Weekly, Jan 6, 1993

Is there a glimmer of a recovery on the horizon? Yes, according to an article in the January 1993 issue of Skylines, published by the Building Owners and Managers Association (BOMA) International.

"Recent economic indicators point to signs of a recovery, but only if Congress and Clinton's new team can effectively address the deficit," said Stephen P. Hokanson,- RPA,CPM, president BOMA International and author of the article "Looking Ahead in the New Year and Beyond."

"If not, look for an increase rates and further devaluation of real estate values."

Many of the positive signs are already present for a recovery, cites Hokanson. For example, the Gross Domestic Product (GDP) grew at an annual rate of $4.94 trillion in the third quarter of 1992, surpassing the pre-recession high of $4.90 trillion. Also, unemployment has now edged down to 7.4 percent from the recession high of 7.8 percent, and year-end holiday retail sales will easily be 5 percent higher than last year.

Despite these positive indicators, the real estate industry is still licking its own wounds as a result of the booming 80's when construction levels soared as baby boomers hit the marketplace.

Much of the construction was based on that expansion continuing, but with the recession hitting in 1990 and the plunge in employment, fully 5 million jobs were never created. In &ct, real growth in white collar service industry employment is not expected until the second half of this decade, according to Hokanson.