In the final weeks of every December, we conduct an industry-wide survey in cooperation with the 10 premier Real Estate Professional Associations, whose Career Centers are powered by SelectLeaders. Again this year, a rich mix of Real Estate Professionals: Candidates, Employers, Principals, Top-line Managers, and HR Executives share their insights and perspectives on the Real Estate Job Market and its prospects for 2016. Because perception often leads to reality, we also share a sampling in their own words.
"I want all of my borrowers focused on getting their projects out of the ground and delivering to market timely... as we lend at floating rates."... "I am nervous we are nearing the end of the cycle, and hesitant to start a new project that delivers in 3 - 4 years."... "Fundamentals of rent, etc. are still good, but everything is increasingly fragile. 9th inning of the cycle. Extra inning(s) possible, but recessionary pressures are mounting."... "Traditional economic theory will not hold true. The economy will experience heightened expansion for a time while interest rates rise."
67% of respondents believe the "Pace of Business" and their associated amount of work and output increased in 2015. In 2016, help is not on the way.
75% believe hiring will either remain the same (44%), or decrease (31%), in 2016.
"Our revised projections for 2016 are the worst in nearly a decade. With minimal growth on the horizon, our team hasn't recruited at local college campuses since 2011. It's getting depressing."... "Hiring people with skill sets needed to succeed in commercial real estate has become increasingly difficult in our market."... "I expect wages finally to begin rising slightly because the job market is stronger and it's harder to find talented people."
70% of respondents expect their total compensation (salary, commission, and bonus) will increase in 2016. And, their optimism is based on facts: 62% received a bonus the previous year. And 58% reported an increase in salary and/or commissions in 2015. Work increased, and so did compensation.
The Federal Reserve hiking interest rates caused the greatest uncertainty for our respondents with nearly half (49%) reporting it will impact their business. Fiscal Policy and Global Concerns were on the minds of many of our respondents.
"It is becoming more and more difficult to acquire new properties at a reasonable price."...
"Fed tightening has created an inflationary market in real estate and construction which is driving living (via housing) to a dangerously high level. Ultimately it will reduce our national standard of living."... "State of stock market has the fastest impact on investments... decline throws portfolio ratios out of balance and real estate investments always are hit hard. Funds dry up and jobs in asset management go away."... "The reality of the interest rate increase won't be felt until it affects real estate values."
84% believe the increasing threat of terrorism will not impact their business. 16% of the respondents involved in security, global companies, or specific sectors reported an increase in time and money related to securing public and employee spaces, especially cited by those in hospitality, aviation, shopping malls and entertainment businesses.
"Increased demand for monitoring technology and security systems, and training of security personnel."... "Primarily increased focus on cyber security."... "More foreign money looking for a safe haven."... "Threat of Terrorism will have an effect on the tourism industry, and I work in hospitality real estate."... "Until Congress & the American public deal with massive overhang in debt, economy will crawl along. The longer it crawls the greater the risks that people will respond to and move toward extremist positions politically both here and abroad. So I would say uncertainty and volatility are the watch words."
74% reported that the Presidential race and election will not affect their business. However, in their own words, this is not necessarily a good thing:
"this country would take off like a rocket. We need to get back to following our constitution, that remarkable document that keeps government in check when followed, and allows our private sector to prosper."... "the Presidential candidates do not inspire confidence."... "We need a sweeping replacement of our leaders in DC and a focus on the economy and getting our country in a growth mode."
Despite uncertainty, below are a sampling of many optimistic and cautiously optimistic responses, as well as reflections on this past year, and how it shapes the future. In the end as one respondent stated, "Everything will be about your own attitude and making sure you hire and retain and grow the right people."