Without a doubt, the most important economic indicator for the commercial real estate market is employment. No other metric more profoundly impacts the fundamentals of our market than the number of people who are productively working. Unfortunately, news on the jobs front, thus far in 2010, has been lackluster and well below most economists' forecasts. This is the main reason why momentum has been lost in what little traction the economic recovery had displayed.
The reason that the real estate industry relies so heavily on job creation is that if people have lost a job, or fear they may lose a job, they do not move out of Mom and Dad's house; they do not move from a one-bedroom apartment to a two-bedroom; they do not move from a rental unit into a purchased single-family home, a condo or a co-op; and companies that are downsizing do not need more office space, they need less.
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