Majority of respondents predict CPI to rise 5%-7.5% this year and other key findings from survey revealed

Chicago, IL, January 31, 2023 — As the real estate industry faces a new year filled with both promise and unpredictability, The Counselors of Real Estate®, a global organization of commercial property advisors, recently surveyed its members to assess current economic sentiments regarding a potential recession, the rate of consumer price index (CPI) inflation, unemployment, and real estate investments, among other topics.

Key findings from the Counselors’ 2023 Economic Outlook Survey show:

• 40% of respondents foresee a flat economy in 2023, but nearly as many (38%) are anticipating a recession.
• Internationally, 75% of Counselors see recession – and a potentially severe one at that – as the likely scenario for the U.K. this year.
• Rather than systematically buying or selling in the current market, 62% of respondents recommend that real estate investors hold their positions this year.
• Despite efforts to bring down inflation, more than 60% of respondents predict the CPI will be between 5%-7.5% in the year ahead, and another 10% expect prices to rise more than 7.5%.

“In the face of one of the most challenging real estate markets ever, inflation levels, rising interest rates and a looming recession remain the driving forces and concerns of this year’s real estate landscape,” said William McCarthy, CRE®, global chair of The Counselors of Real Estate®. “The Counselors of Real Estate proactively surveys its members on crucial real estate issues to identify the most current attitudes in order to target trends and offer analysis of key data and its impact on real estate asset classes and the industry at large.”

McCarthy noted the survey results are in alignment with The Counselors of Real Estate’s Top Ten Issues Affecting Real Estate, the organization’s annual report identifying current and emerging issues, which identified Inflation and Interest Rates as the leading concern as the industry starts to see the longer-term effects of the pandemic on real estate.

The survey results were discussed at a recent webinar titled, “Decoding The Economy: Mission Possible?”, hosted by The Counselors of Real Estate’s Economic Advisory Council, an esteemed group of American and European advisers with a stellar reputation for economic forecasting. Each member is renowned for her or his reputation for economic forecasting based on research, data and empirical evidence and can speak to issues that have a current or future impact on real estate and communities.

Additional survey findings include respondents’ thoughts on labor markets, interest rates and offshore economics, such as:

• Labor markets are expected to stay tight, but monetary tightening is forecast to push unemployment up into the 4%-5% range, according to more than half the respondents. Meanwhile, one-third of the Counselors see joblessness rising above 5% by year end.
• Virtually none of the respondents think the U.S. Federal Reserve is finished raising interest rates. Many feel the pace of increasing the federal funds rate will slow, but more than 20% see the Fed target rising above 5% before peaking.
• Some 64% of Counselors feel 2023 is a favorable year for international investors to place capital into U.S. real estate markets.

To access the results of The Counselors of Real Estate® 2023 Economic Outlook Survey, click here and to view the webinar, click here.

About The Counselors of Real Estate®:
The Counselors of Real Estate® is an international organization of commercial property professionals from leading real estate, financial, law, valuation, and business advisory firms, as well as real property experts in academia and government. Membership is selective and extended by invitation, although commercial real estate practitioners with 10 years of proven experience may apply.

Counselors have resolved the dispute between the developer of the World Trade Center and its insurers post September 11, led the privatization of U.S. Army Housing, developed a multi-billion-dollar, 10-year real estate master plan for Philadelphia Public Schools, created and endowed the MIT Center for Real Estate, and valued both the Grand Canyon and Yale University. Counselors reside in 21 countries and U.S. territories, with only 1,000 professionals holding the CRE® credential worldwide.

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