Holiday Forecast for 2004
In last year's holiday forecast, GG+A predicted a weak economic recovery in 2003, but recommended purchasing stocks at their then bargain basement levels.
For 2004, we predict a healthy growth in GNP. But the real estate opportunities accompanying economic growth will not be evenly distributed among regions and uses.
In an era of transition, global competition and information explosion, efforts to return to the idealized past will not make successful future developments or places.
Best performers will stay tuned to demographic differences and customize their products and services to serve carefully targeted particle markets. Demographic characteristics, aptitudes of the labor force, and the relative affordability of housing will critically influence the economic make-up of regions and non-residential development opportunities.
Residential Forecast & Niches
- Baby Boomers will continue to be the primary market for second and vacation homes, both in major urban centers and lower cost, high quality-of-life domestic magnet metro areas.
- Generation Xers will be the major buyers of townhomes, condos, and starter homes.
- Asians maintain a strong preference for home ownership and multi-generation living, creating demand for single-family, multi-floor detached housing products.
- Expect a wide variation in apartment demand, but the beginning of a modest recovery for most regions. Markets with a high proportion of Generation Y's, retirees, and minorities will rebound sooner. Other apartment markets may take until 2005 to come into balance.
Non-Residential Forecast & Niches
- Office space absorption is unlikely to turn positive in 2004. The renter's market will continue beyond 2004 in many high vacancy markets.
- Industrial and distribution demand, however, will originate from the need to relocate and retool facilities to maximize logistical efficiencies and the use of productivity-enhancing automation and communication equipment.
- Rewards will come to those retailers and retail developers who identify and understand expenditure patterns and unique tastes of specific ethnic groups and social classes.
The San Francisco & Midwest offices of GG+A wish you & your family safe harbor in 2005.