300 Biscayne is PMG's first South Florida multifamily development.

MIAMI—Nobody likes to hear the “R” word. But more people are debating it.

In fact, Jack McCabe, owner of McCabe Research & Consulting, wasn't at all shy about opening a discussion on recession during a keynote that offered insights into South Florida market trends at RealShare Apartments East.

“I really believe there's going to be a recession this year,” McCabe told listeners. “A lot of people think I'm crazy—hey did 12 years ago. I believe the market forces that are underway right now are such are going to take effect on the US this year, especially the global recession.”

The debate continues, of course. Spencer Levy, national research director for CBRE brokerage, has his own unique perspective. He thinks recession is coming but not necessarily this year.

“The wrong answer is we have no recession,” Levy said at the 21^st annual real estate conferenced sponsored by the University of San Diego's Burnham-Moores Real Center for Real Estate, as reported by the San Diego Tribune. As he sees it, the economy is stuck in “cyclical stagnation” and a recession would actually be a good thing.

One thing is certain: The Federal Reserve is raising interest rates more aggressively than some thought. And we may see another rate hike in March. Moves like these lead us toward recession most of the time.

“I think the new administration has strong policies, but it takes 18 months before you see any results at all,” McCabe said. “I think we're are going have a recession, not as anywhere near what we had last time. Shorter, not as long lasting. We're going to have some affects from it in real estate because so many of our buyers are foreign nationals.”

Will it be as bad as it was in 2008? Will it look exactly like it did in the last cycle? McCabe offered a resounding “no.” But he is uncomfortable with some of what he sees going on in the multifamily market in South Florida.

“As I stand here right now there are 340 multifamily units under construction, permitted or announced in the three-county area,” McCabe said. “There has to be a change in mentality or there is going to be some tough times down here. Education and infrastructure are two problems we already had. Affordability of housing is beginning to be one again. There's a rush to get projects out of the ground to ride the current wave.”

MIAMI—Nobody likes to hear the “R” word. But more people are debating it.

The debate continues, of course. Spencer Levy, national research director for CBRE brokerage, has his own unique perspective. He thinks recession is coming but not necessarily this year.

Instant Insights /

Could South Florida Multifamily Market Soon Bust?

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