At a recent meeting with an investor/owner, people around the table took pause as our client shared the latest drop in the Dow via his Blackberry. The shear number was alarming, but because we’re in real estate and focused on the underlying economic impact vs. the emotional meter, we believe that one bad day does not make a month of bad days.
We’re fortunate to be in a knowledge-based city with strong health, education and technology sectors, and international connections. These factors provide us employment statistics that are better than the national picture. Perhaps people on a personal note were startled, and a few risks were definitely highlighted, but it didn’t alter our outlook overall. I still think we’re going to continue to see measured growth in our industry.
We are less dependent on the federal government here than many other US markets and that is where the immediate cuts will originate. Our local defense contractors are more technology-based and should therefore be impacted less by a retrenchment.
Obviously people are unsure about how this will affect the recovery. Our best markets of downtown and Route 128 will continue to outperform other suburban markets. Older product will probably struggle a bit. Commercial sales will continue to increase because the assets that are coming on line are trophy product, and barring an unexpected jump in interest rates, I expect this shouldn’t change.
The latest stock market decline, jump, and decline are continued symbols of a slow, choppy recovery.