Market downturn approaching, but not imminent

Property fundamental have helped abate recent pessimism about the U.S. economy, but gradually declining market conditions are expected to weigh on the asset class during the next 12 months, according to RCLCO Real Estate Advisors’ Mid-Year 2019 Sentiment Survey Results, which indicates the RCLCO Current Real Estate Market Sentiment Index (RMI) has decreased since mid-year 2018 from 68.0 to 49.2, but is up from the RMI of 37.5 six months ago.

Survey respondents believe most property types are solidly in the “late stable” phase of the real estate cycle, with all but retail pulling back from the cycle peak compared with the firm’s year-end 2018 sentiments. Industrial, age-restricted/AAC and seniors/CCRC assets are on the border of the “early stable” and “late stable” phases.

In the current report, only 12 percent of survey participan