An early start but it's worth the effort

Nick Jopling, Head of Residential at CB Richard Ellis

Wednesday at Boca Raton started early, which was a bit disappointing as I had been given an upgrade to the beach resort after yesterday’s lift incident and a mix-up with my reservation - 'please accept our apologies, Mr Jopling, and an upgrade' is now one of my favourite sayings !

Unfortunately lying in bed was not an option, as I had registered for the 'Strategic Apartments' conference that runs alongside the main event and the network breakfast started at 7.15am!

The programme started with an economic outlook and a view of the trends in the apartment markets. In fact, the whole day was spent in a series of high powered panels debating the impact of the economy on said market. There is no doubt that the housing market in the US has suffered worse than our own.

One would have thought that the apartment (rental) market would have been all right with all the foreclosures (repossessions) and the overall loss of confidence in home ownership. It’s true that home ownership, boosted by sub-prime mortgages, reached 71% in 2007, but that's now down to about 68% today and falling. Surely, all these ex-homeowners would enter the rental market?

This was the case to begin with, but as the recession gathered pace by the end of 2008, Americans were losing their jobs at a rate of 700,000 a month. In the 24 months to the end of 2009, 7.2m Americans had lost their job and this has impacted not just on the owner-occupied market, but on the apartment market as well. There has been a noticeable increase in people doubling/tripling up or returning to live with Mum and Dad. Worst hit have been Florida, California, Michigan, Oregon and Nevada.

This naturally put downward pressure on rents, although the consensus of opinion and some really credible data sets suggest that the worst is over. In most markets, it is anticipated that rents will stabilise and in some cities, principally in the North East and other major gateways, they are expected to show some growth in 2010. The cities the conference was the most bearish about were Atlanta, Phoenix and cities in the Mid-West (excluding Chicago).

There were two very impressive features of the day, firstly the quality of the data and detail of the information that was shared. The second thing was the candour and willingness to share thoughts and views on individual markets by very senior executives of well-known businesses that anyone working in real estate would have heard of.

This huge conference is like a large club; everyone (apart from Chris and I) seems to know a huge number of other delegates. Everyone is approachable and there is a genuine feeling of camaraderie. We have attended numerous meetings co-ordinated by our CBRE US colleagues - all of these were interesting, informative, intelligent and bizarrely almost always like a meeting of friends.