Wells Fargo’s 2021 Annual Economic Outlook
As we close out the year, the prognostications for the coming year continue to be issued. Wells Fargo recently released their 2021 Annual Economic Outlook, where they say 2020’s pandemic was equivalent to a magnitude 9 earthquake. Indeed….
The longest U.S. economic expansion since the end of the Second World War came to an abrupt end earlier this year as the COVID pandemic essentially shut down the economy. Following an unprecedented plunge in Q2-2020—real GDP nosedived at an annualized rate of 31.4%—economic activity rebounded sharply in the third quarter…”
“Few areas of the economy have felt the seismic effects of the COVID crisis as directly as real estate. The need to socially distance has wreaked havoc on office buildings, retail stores, hotels and other types of commercial real estate where close-contact engagement is intrinsic to the property’s value proposition. The reverberations so far,however, have not been universally negative…”
Moreover, the experience over the past several months has left those who preferred the vibrancy of city living yearning for greener pastures. There now appears to be an exodus of urban renters moving to the suburbs or beyond for single-family homes, a trend that has surely been supported by record-low mortgage rates and the desire for more space to accommodate home offices, home gyms and virtual learning. The need for more livable space has translated to rising apartment vacancies…and soaring home sales…which has cascaded into record high builder confidence and a rapid increase in new single-family construction.