Forecasting Economic and Physical Health

What to track in a changing economy—plus, an epidemiologist’s take on COVID-19’s future

IREM 2021 logo

The Institute of Real Estate Management’s 2021 Advocacy Impact Day took place just as the U.S. Congress was negotiating the final terms of the $1.9 trillion COVID-19 relief package. The annual event informs IREM members about issues affecting the real estate management industry and ways to advocate for meaningful change. Here are highlights from the March 9 virtual meeting.

Economic Policy

It’s an exciting but also a confusing time, economist Todd Buchholz told the Impact Day audience. Buchholz, who served as director of economic policy under President George H.W. Bush, advised watching and gauging the pace of economic recovery through three critical levers: interest rates, oil, and trade. Watching developments in these areas can help forecast growth or a downturn. But Buchholz warned that inflation, another key indicator, could throw the economy off course.

“The Federal Reserve Board’s policy on maintaining low interest rates hasn’t led to hyperinflation,” Buchholz said, “but with the economy making impressive gains since spring 2020, the Fed risks overstimulating the economy….If inflation pierces the 2.5% mark, [Federal Reserve Chairman Jerome] Powell will have to go back on his word and begin tightening short-term interest rates, which will send up borrowing costs for home buyers, car buyers, and companies.”

Buchholz estimated 80% of office space will come back when workers begin to return to the office. He also expressed optimism about retail, including brick-and-mortar. “Opening a brick-and-mortar shop has been shown to increase online sales by 29% in the store’s region,” he said, noting the trend toward more experiential retail will be even more important post-pandemic. Retailers need to create an interesting space where shoppers can experience the product, he said.

COVID-19 Prognosis

Thomas Songer, assistant professor of epidemiology at the University of Pittsburgh Graduate School of Public Health, gave IREM members a look at the science behind remaining prepared for COVID-19. “Thirty percent of people [infected with COVID-19] never show symptoms.” he said. While most of the U.S. population is expected to be vaccinated by summer 2021, the virus will circulate throughout the population for years, likely requiring an annual vaccine.

Songer stressed the importance of adequate building ventilation. Investments in clean air filters and improved ventilation systems are worth the expense, he said. Even with the availability of vaccines, the pandemic has raised awareness of air quality and building wellness.

Preparation to Meet with Legislators

A key element of IREM’s advocacy efforts is preparing IREM members to meet and build relationships with federal, state, and local legislators. Real estate industry issues discussed at the event included the eviction moratorium, the SAFE Banking Act, and 1031 exchanges.

IREM advocacy experts shared tips on securing meetings with legislators, best practices for meetings, and meeting follow-up for optimal results.

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