Hampton Roads August 2022 – Key Take-Aways
Renee Haltom – Federal Reserve Bank – Guest Speaker
- We got to this current point of inflation because demand is a lot higher than the available supply.
- Demand surged in COVID, 6 trillion dollars in stimulus was pumped into the economy, and we kept people home from spending the money.
- Global commodities also made things worse.
- As far as a recession, “If this is a recession, we are in the strangest recession we have been in.”
- The colloquial definition of a recession is 2 quarters of negative GDP. That however is not the true definition of a recession.
- A committee at the Bureau of Economic Research is charged with determining a true recession. This committee looks at a broad array of indicators to determine a true recession, and to note a lot of those indicators are still up at this very moment.
- COVID itself was a consumption led recession.
- A big part as to why the economy has been so strong during COVID was the household sector.
- Savings rates also skyrocketed during COVID. The government gave out a lot of money, and then in essence did not allow anyone to go out and spend it.
- At the peak of COVID it was estimated that households were sitting on 3 trillion in savings.
- Incredibly rapid job growth post COVID.
- Why is labor still so tight?
- People left the work force in huge numbers.
- A lot of people retired early.
- Another reason as to why labor is still tight is the “churn” in the job market…people leaving one job for a better one, or more suitable one.
- Inflation is contributing to people seeking higher paying jobs.
- There currently are about two open jobs for every one unemployed person.
- We are currently 3 million workers short.
- VA’s recovery rate in comparison to the rest of the country has been slow.
- VA historically is a low growth state.
- VA is closely tied to government; this contributes to the slow growth. Although government is stable, its slow growing.
- VA does not have major metro growth centers like other states.
- VA may not be hungry enough as a state and does not market itself well.
- Current outlook on inflation…
- For much of 2021 fed calling the current state of inflation “transitory”, and this typically means fast by most people. This is not what we at the FED meant when using the term.
- The inflation we are actually seeing is sustained.
Don Crigger – Colliers
- Overall, the office market has continued to hold up well and weathered through this time.
- Call centers have given up space, but overall occupancy is still high.
Ashton Williamson – Colliers
- Regarding industrial, this market has been challenged overall due to cost increases.
- Very high construction costs.
- Very high demand, and very little delivery of space, which has caused a rent growth no one would have ever expected.
- Rent growth 50 to 80 percent over the past 36 months.
- It’s a good time for landlords and sellers.
Keith Slattum – Dollar Bank
- Rates are up.
- Construction delays continue to cause problems.
- Lots of pressure to obtain electrical parts.
Josh Gerloff – RRMM Architects
- Can’t find people to hire.
- If the people were available to hire, we would have 15 long term positions available.
- Construction is happening, things are definitely happening.
Jennifer Perry – Whiting Turner
- Materials are still a problem.
- Electrical is still an issue with some lead teams as high as a year.
- Material costs are so high that it is causing potential customers to rethink projects.
Hugh Cohen – Cohen Investment Group
- We have been very focused on self-storage, multifamily.
- We have shifted to storage facilities that are automated. Those that don’t require really anyone on site.
Destini Harrell – Amplify Community
- Currently working on a DEI research platform.
- Working to bring more awareness and involvement to DEI which is Diversity, Equity, and Inclusion.
- Also working on the Creative Summit, which brings people together to talk about why arts and culture is important to economics.
Elizabeth Paasch – Divaris Real Estate
- The Hampton Roads region is pretty steady when it comes to rent.
- Seeing some rent growth in the area.
- Still seeing some tenants continuing to right size post pandemic.
Richard Crouch – Woods Rogers Vandeventer Black
- Still seeing the same level of sales.
- A lot of the same trends remain, a struggle to hire people.
- Interest rates have continued to slow down acquisitions.
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