Three Recent Surveys Mark Turn in Public Sentiment for Economy and Real Estate

Three Recent Surveys Mark Turn in Public Sentiment for Economy and Real Estate Federal Reserve

As reported by Bloomberg, the Federal Reserve’s January 2024 Beige Book survey indicates that resilient consumer spending has supported the US economy in recent weeks, compensating for weaknesses in manufacturing and other sectors. While most regions reported little change in economic activity, firms expressed optimism about future growth, often attributing it to the possibility of falling interest rates. The report highlighted easing inflationary pressures, with increased consumer price sensitivity affecting retailers’ profit margins.1

However, the Beige Book also revealed signs of a cooling labor market, with many regions reporting little to no net change in overall employment levels, and firms anticipating further declines in wage growth over the coming year.

Some district-specific highlights from the Beige Book include increased optimism in the Philadelphia construction sector, challenges related to affordable childcare in Dallas, and the use of generative AI to supplement productivity in Atlanta. Additionally, there were reports of lower-income households relying more on credit cards and “buy now, pay later” options in Cleveland. New York reported an increase in bonuses for 2023, while Chicago noted that farms ended 2023 in strong financial positions.

Despite the cooling labor market, the US economy is estimated to grow at an annualized rate of 2.4% in the fourth quarter, according to the Atlanta Fed’s latest estimate. Resilient consumer spending remains a driving force behind the economy, with December retail sales exceeding expectations. The Fed’s preferred inflation gauge has fallen over the past year, and excluding food and energy categories, the core metric rose 1.9% in November, slightly below the Fed’s 2% target.


As reported by the Wall Street Journal, consumer sentiment in the United States has experienced a significant increase, with a 13% leap in the first half of January compared to December, according to the University of Michigan. This follows a sharp rise in December, resulting in a combined 29% surge from November – the largest two-month increase since 1991. The positive shift in sentiment is widespread, spanning across consumers of different demographics.2

The recovery in sentiment is seen as a potential source of positive momentum for the economy, according to Joanne Hsu, the director of the Michigan survey. Factors contributing to this improvement include cooling inflation, signals from the Federal Reserve that interest-rate increases are likely behind, and a robust labor market putting money into consumers’ bank accounts.

Despite the recent gains, the sentiment measure is still approximately 20% lower than pre-pandemic levels in 2020. However, Americans are becoming more optimistic as concerns about recession in 2024 fade, driven by improving economic conditions. Other indicators, such as the share of consumers expecting to be financially better off and a consumer confidence measure, also reflect a positive trend.

Real Estate Investors

This seems to be contributing to positive sentiment among real estate professionals. As reported by ConnectCRE, the CRE Finance Council (CREFC) reported a substantial increase in its Fourth-Quarter 2023 Board of Governors (BOG) Sentiment Index survey, reaching 109.9 – a 33% surge from the previous quarter’s 82.7. This marks the largest quarterly increase since the survey’s inception, indicating a significant positive shift in industry sentiment within the commercial real estate (CRE) finance sector.3

While the survey portrayed a broadly positive outlook, responses included worries about potential rate cuts amid a slowing economy, challenges in the multifamily sector, and uncertainties in financing and liquidity. Respondents also expressed concerns about the possibility of increased inflation, slower GDP growth, and specific issues within sectors, such as oversupply in the multifamily market and stagnation in the office sector.


This is for informational purposes only, does not constitute individual investment advice, and should not be relied upon as tax or legal advice. Please consult the appropriate professional regarding your individual circumstance. Statements concerning financial market trends are based on current market conditions, which will fluctuate. Past performance is not indicative of future results. Potential cash flows/returns/appreciation are not guaranteed and could be lower than anticipated.

Securities offered through Concorde Investment Services, LLC (CIS), member FINRA/SIPC. Advisory services offered through Concorde Asset Management, LLC (CAM), an SEC registered investment adviser. 1031 Capital Solutions is independent of CIS and CAM.




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