Real Estate Impact of Terrorist Attacks to be Short-Lived

PALO ALTO, CA-Last month’s terrorist attacks will not have a long-term impact on the attractiveness of real estate investments even though it will worsen the economic downturn over the next several months, a special report by one of the nation’s leading investment brokerage firms says.

Though the US will go through a mild recession, the Federal Reserve Board’s long string of interest-rate cuts–including the half-point reduction announced earlier this week–will combine with other factors to trigger a robust rebound in 2002, according to the report by Marcus & Millichap Real Estate Investment Brokerage Co. The Palo Alto, CA-based firm provided an exclusive copy of the report to GlobeSt.com before releasing it to the rest of the media.

“At this point, no structural or fundamental causes have emerged to undermine the long-term favorable potential of real estate investments,” says Harvey E. Green, Marcus & Millichap’s president and CEO. “The investment real estate industry is better positioned to weather the current mild recession than in the 1990-91 recession due to stronger real estate supply/demand fundamentals, a more balanced market and ample liquidity.”

Further, says Green, the Federal Reserve’s interest-rate cuts–along with the tax-refund checks being mailed to consumers now–will keep the recession from becoming too severe and set the table for a strong economic rebound in 2002. Other key findings of the report: