openPR Logo
Press release

Real Estate Investment Outlook July 2019

07-15-2019 12:53 PM CET | Business, Economy, Finances, Banking & Insurance

Press release from: Calstate Companies

LOS ANGELES, CA. The speeding up in GDP growth in the US last year was mainly induced by fiscal policy because of corporate tax cuts. Most of these windfall profits have been used to buy back equities instead of increasing capital expenditure, which will have a negative effect on the real estate industry

According to the Bureau of Economic Statistics, buyback programs increased from around 90 billion US dollars at the end of 2017 to approximately 225 billion dollars at the end of 2018, exceeding the record high of 175 billion dollars posted in 2007 by around 50 billion dollars.

As reported by the University of Michigan index, business and consumer confidence has dropped sharply from 35 points at the end of 2018 to around 10 currently, indicating that firms and private households now see less favorable economic prospects for the US economy. Given a slump due to heightened political uncertainty about future trade agreements and a cooling of our economy, capacity utilization in the US has also started to trend down, currently standing at 78% of total capacity. At the same time, the growth rate for manufacturers' new orders for non-defense capital goods has reached its lowest level since early 2017, while the rate for consumer durable goods has already dropped into negative territory.

Meanwhile, consumer-borrowing costs have started to rise. The commercial bank interest rate for credit cards reached 17% in the first quarter of 2019, while interest rates on car loans climbed by two percentage points in 2018 and now hover around 5%, reflecting the deterioration in consumer credit quality. For instance, the 90+ day delinquency rate on auto loans moved higher in 2018 and now stands at around 5%, very close to the level seen during the Great Recession of 2008. As 85% of new cars sold are financed by consumer loans, you can imagine what might happen if unemployment starts to rise. Delinquency rates could accelerate, credit supply may shrink, disposable income will likely plummet, and consequently private consumption could decelerate and push GDP growth into negative territory – causing a recession in the US.

Should such an event occur, we would likely recommend a reduction in real estate investments. However, from a practical short to medium-term perspective, resolution of the trade tensions between the US and China is of paramount importance to real estate. This should include removal of the tariffs recently imposed by the US and of the retaliatory ones by the Chinese government. Such a deal on the future structure of trade between the US and China would reduce uncertainty and hence unfreeze investment spending.

POBOX 5133
Torrance, CA 90593
Press Contact: Eugene Vollucci

ABOUT THE AUTHOR: Eugene E. Vollucci, is considered to be one of the foremost authorities on real estate taxation and real estate investing and has authored books in these fields published by John Wiley & Sons of New York. He is the Director of the Center for Real Estate Studies, a real estate research organization. To learn more about the Center for Real Estate Studies, please visit our web site at


This release was published on openPR.

Permanent link to this press release:

Please set a link in the press area of your homepage to this press release on openPR. openPR disclaims liability for any content contained in this release.

You can edit or delete your press release Real Estate Investment Outlook July 2019 here

News-ID: 1803280 • Views:

More Releases from Calstate Companies

Making Money With Residential Income Properties
LOS ANGELES, CA. You have heard time and time again “If I only had purchased that rental property, I would be worth millions today”. Years ago, I discovered that real estate was the best investment to control risk and create wealth. The Real Estate Digest reports that seven out of ten millionaires made their money in real estate, and Forbes magazine states that there is a three times greater chance
Just released Real Estate Investments Outlook June 2019
Los Angeles, CA. After being a stronghold of growth in 2018, our economy is expected to slow this year due to the vanishing of the fiscal stimulus and the delayed impact of prior rate hikes. How will this scenario influence the real estate investment markets? At the beginning of the year, growth was well above expectations. The labor market remains strong, with solid wage growth supporting consumer spending. Our economy
How Trump Buys Real Estate
How Trump Buys Real Estate
LOS ANGELES, CA. If Donald Trump did, in fact, purchase Russian real estate, he might have employed the following strategies: First, he would acquire a team of experts to help him. Trump understands the old saying: “If you act as your own attorney, you have a fool for a client.” This could also apply to the person who tries to be his or her own property manager, real estate broker, accountant,

All 4 Releases

More Releases for GDP

IATA's CEIV-Pharma Certification or HSA's GDP Certification?
Players throughout the pharmaceutical supply chain are experiencing growing pressure to gain accreditation for handling the high-value, temperature-sensitive cargo, as having a certification becomes more commonplace, rather than an exceptional feat in the industry. There are currently 2 different measures of standards, one is IATA's CEIV-Pharma Certification and the other is HSA's GDP Certification. There are major players on both sides of the fence which hold – GDP-compliant certificates and CEIV-pharma certifications.
Exploring the recent PQG / ECA guide to GDP
The Pharmaceutical Quality Group (PQG) issued a monograph on Pharmaceutical Distribution in 1997 and initiated planning to revise this in line with the new EU GDP regulatory guideline (a final revised version was issued in March 2013 with an effective date of 8 September 2013). Although the 2013 EU-GDP guidelines provide far more details than previous guidelines, it is clear that there was and is a need for further guidance on
Tire Cord and Tire Fabrics Market - Sluggish GDP growth over 2025
Global Tire Cord and Tire Fabrics Market: Snapshot Tire cords are the fundamental tire fortification materials, which helps in keeping up tire's dimension under various physical conditions and accordingly brings about comfortable riding. For instance, nylon tire cord, which are set up from high tenacity incessant filament yarn by means of handling and curving, gives high quality, weariness resistance, affect resistance, and high attachment. As the automotive in flourishes with rising
Is demonetization responsible for lower GDP growth rate?
Decimal Point Analytics has released an weekly digest on 4th September titled ‘Is demonetization responsible for lower GDP growth rate?’ In this piece, Decimal point has weighed upon the recent announcement of GDP numbers which has been below market expectation. Its arguments are counter to the popular consensus, that demonetization has been the prime reason for this considerable fall in GDP. The author has highlighted the fact that it’s the businesses
European GDP Association nominates new Advisory Board Member
So far the Board of the European GDP Association comprised four members from the industry side, supported by a representative from the Finnish Medicines Agency FIMEA. Now a new Board Member has been nominated on the industry side. Dr Laura Ribeiro, who is a Responsible Person at ID Logistics (formerly Logiters) in Portugal, has recently accepted her nomination as the fifth member of the GDP Association's Board. Prior to her
US GDP Up 1.7% Shattering Economists Predictions
Aug. 01, 2013 - HONG KONG -- On Wednesday the US Commerce Department released its highly anticipated report on GDP, stating that in the second quarter the US economy grew 1.7% driven by an increase of 1.8% in consumer spending and 9% in business investment. New home construction was another important driver of growth, with investment rising 13.4%, the fourth consecutive increase. This gain beat expectations of a 1%