Usually, as we near the end of a year, many are eager to embrace a new year with new goals, ideas and so forth. For the majority of us, that has a new meaning this year due to many reasons. We are ready to send 2020 on its way and make way for 2021!! Let’s take a look back into 2020 and take a peek as to what 2021 may hold in store for us as it pertains to the construction and remodeling industry in the Dallas-Fort Worth area.
2020 will be a year that will be remembered for the rest of our lifetimes, even generations. Who would have thought that a pandemic such as COVID 19 would cause the global economy to come to an almost complete stop. Around mid-March, the economy shut down in an effort to stop the spread of this virus. This brought about March and April witnessing a loss of approximately 22 million jobs in the US with an unemployment rate of around 14.7%. Around 50 million people in the US were applying for unemployment. The government responded with a reduction in lending interest rates, a federal stimulus package of about $3 trillion and other programs to help businesses fare the situation.
Our habits changed completely in order to cope with the situation. We saw students staying at home and learning over online platforms, many workers were sent to work remotely and our shopping experience shifted to more online purchases. This caused positive and negative disruptions in the commercial real estate industry in relation to these new habits. Real estate related to health care, data centers, cell towers, and industrial have seen a positive impact, but other real estate areas haven’t. The US construction industry contracted approximately 6.5% this 2020, but the expectation is 2% for 2021.
This panorama may seem hopeless, but that shouldn’t be the case. With an
US approved vaccine against COVID 19 and a second federal stimulus package recently approved by the government, we can hope to see a faster economic recovery. It is expected that we will experience a slow growth in the last quarter of 2020 and first quarter of 2021. But what about the Dallas-Fort Worth area?
The DFW area was hit like any other city with the pandemic and the issues involved with the pandemic. But not all has been as bad as it may seem, since this pandemic might have accelerated the exit of several companies from California and setting base in the DFW area or expanding here as well. This can mean great things for the commercial real estate industry. Even with a contraction of this industry in general, there will be a need to continue to have spaces available for the new influx of business arriving into the area. With this information, we could expect a growth in the area amid the current slow economic growth.
Commercial real estate in general will have to reinvent themselves to present a value proposition that will attract business into their properties. Some of the ideas that can be considered are building more smart buildings, amenities or attractives that would intere
Life is full of surprises. There are many situations that may not go as planned, but we must learn to adjust our sails to the direction of the wind. As Maya Angelou would say “I can be changed by what happens to me. But I refuse to be reduced by it”. Let’s embrace 2021 with the lessons learned from 2020 and keep moving forward.
References:
https://www.aia.org/articles/6312502-nonresidential-building-spending-projected
https://www.enr.com/articles/50766-construction-forecast-a-slow-road-to-recovery
https://www.bizjournals.com/dallas/news/2020/12/10/california-relocations-dallas.html
https://www.bizjournals.com/dallas/news/2020/12/23/dallas-tech-relocations.html