12/22: MetroIntelligence Economic Update by P. DUFFY

MetroIntelligence Economic Update by P. DUFFY


November Leading Economic Index edges up another 0.6 percent as pace of growth slows

The US Leading Economic Index (LEI) continued rising in November, but its pace of improvement has been decelerating in recent months (+0.6% in November vs. +0.8% in October and +0.7% in September), suggesting a significant moderation in growth as the US economy heads into 2021.


November Chicago Fed National Activity Index drops sharply, but still in positive territory

Led by slower growth in employment- and production-related indicators, the Chicago Fed National Activity Index (CFNAI) declined to +0.27 in November from +1.01 in October. Three of the four broad categories of indicators used to construct the index made positive contributions in November, but all four categories decreased from October.


New home pending sales up another 0.7 percent in November and 44.9 percent year-on-year

The New Home Pending Sales Index grew 0.7 percent month-over-month and 44.9 percent year-over-year. Work-from-home, low interest rates, healthy home equity, a robust stock market, and favorable demographics are the primary drivers of today’s housing strength.


Home value growth breaks records as rents stabilize

Rent growth began to turn around in November after a long slide that began in February, and home value growth soared to new heights, setting the stage for an expected takeoff in sales, continued recovery in the rental market and another 10 percent growth in home values in 2021.  Annual rent appreciation rose from 0.7 percent in October to 1.1 percent in November, bouncing back after nine months of decline.


Pandemic has accelerated shift to new hybrid retail store model which will change how these assets are priced

Disruption to retail supply chains and operations accelerated in 2020, further blurring the lines between brick-and-mortar retail and logistics real estate as omnichannel became the most dominant and resilient platform. The integration of retail and industrial real estate is creating a new asset class with implications for investors and occupiers alike. This includes stores with both physical shopping and purchase shipment services to customers, as well as ‘dark stores’ or retail-to-industrial conversions that provide pickup and shipment services without in-store shopping.