The year to come

By: J. David Chapman/December 28, 2023

As I close out 2023, I reflect on my eight years writing this real estate column publishing 416 articles in The Journal Record.

Thank you for reading and supporting my writing.

Realty1, my boutique brokerage, located in downtown Edmond, celebrated its 20-year anniversary this year and I completed my 25th year as a professor of real estate at the University of Central Oklahoma. I have also had the opportunity over the last six years to serve the state of Oklahoma as a real estate commissioner.

To say I am involved in real estate would be an understatement. Only my family, friends, community, and God, occupy more time in my life than real estate. When thinking about real estate this time of year, I find myself trying to forecast and predict what the year to come will look like. I think about home sales, rental prices, retail prosperity, office space absorption, multifamily occupancy, and industrial expansion.

Most economists now believe there is an increased chance that the U.S. will avoid a recession and achieve a soft economic landing in 2024, but economic growth will slow, and downside risks are elevated. The commercial real estate industry has been facing headwinds since the onset of the COVID-19 pandemic, and many of the persistent challenges will continue in 2024.

There are bright spots in the commercial real estate outlook – mostly in the strong demand for multi-family (apartments) and industrial (warehouse) property. But even those are starting to see adjustments. Interest rates, insurance prices, and in some markets abundances of newly constructed product are having effects on multifamily transactions. Likewise in the industrial market we expect stabilized and normalized performance because of the number of warehouses that have been built and a slowdown in the growth of online internet purchases.

Unlike multifamily and industrial, retail has experienced fewer new construction deliveries of products over the past few years which should speak well for occupancy in the coming year. The normalization of hybrid working arrangements will continue to limit the growth of office demand.

I expect residential sales to be slow and stabilized pricing in the first half of the year, but interest rates should be adjusted as the year progresses and then we will see sales increase and another housing shortage by year end.

Thanks for reading this year and have a wonderful 2024!

– J. David Chapman is professor of finance and real estate at The University of Central Oklahoma (jchapman7@uco.edu)