Economy. We have long accepted the fact that we have a “world” economy, where events on other continents will affect what happens in the United Sates and vice versa. But, there’s always been that lingering thought that distant continents, and their problems, are adequately repelled by that distance, giving our country insulation from them. Enter COVID-19, the Coronavirus, and the possibility of a health pandemic. What began in China has now affected the world. Precautions such as closing borders, closing businesses, restricting airline traffic, and closing schools, have taken a toll in China, and directly affected the rest of the world, and economic indicators are pointing to a turn-down in the economy. Some economists now believe the chances of a recession in the U.S. are at least 50-50 as the U.S. considers many of the same precautionary measures.
Combating the virus will now be one of the main goals of every branch of government at state, local and federal levels. What measures will be taken, what effect those measures will have on the economy, and what is the cost are discussion points. Healthcare is at the forefront. Containment is probably not possible; recognition testing is challenging as there doesn’t appear to be a methodical testing procedure; and how soon can a vaccine be developed. All of these are important. Time will help alleviate the virus as it burns its way out when the flu season leaves, but then there’s always next year. The economy will slow down. The stock markets will become more volatile until the virus dissipates.
Briefly though, what has occurred? The Federal Reserve, to help liquidity in the economy, reduced the fed fund rate by 50 basis points. The federal government has set up a task force to evaluate and advise and passed legislation funding $8.5 billion to address the virus issues. The stock markets are gyrating up and down as the perceived effect of the virus on the world economy is analyzed each day.
In the U.S., retail has been taking this on the chin. Consumer traffic at specialty stores and department stores is down. Restaurants and entertainment venues are also adversely affected as people seem to be just staying away. Manufacturing activity has slowed. Employment numbers released the week of March 2, however, show private businesses added over 183,000 new jobs in February. Reports show that almost all of February’s job creation – 133,000 – came from companies that employ more than 55 workers. Service sector jobs were the area where most of the gains were registered. Construction related jobs also posted strong growth with over 18,000 jobs added.
Retail Development. Development remains active, though projects are limited in scope. Jim Wilson & Associates and its affiliate, JWA Ventures, continue to find excellent projects in the build-to-suit category and grocery anchored centers. A recently opened unit is Denham Springs Dental – Denham Springs, LA. Grocery anchored centers under active development include:
Tobesofkee Crossing, Macon, GA – Publix anchored and 19,500 SF of shop space, two outparcels and scheduled to open Summer 2020, and
The Shoppes at Ola Crossroads, McDonough, GA – Publix anchored and 22,500 SF of shop space, three outparcels and scheduled to open in Spring 2021.
Residential. In the U.S., as a whole, the shortage of new housing starter homes looms over the industry. The recent drop in the fed funds rate just put a new exclamation point on the mortgage world as interest rates on a thirty-year mortgage pushed well below the 4% mark moving to what some people are defining as the “lowest 30-year mortgage rates ever!” New loan applications increased 26% from the prior week. In Montgomery, Alabama, New Park, the Jim Wilson & Associates residential development, has over 64 opportunities for new homes, either as a completed home or a new lot ready for construction. Guided by Anita Carter (VP-Residential Sales for Jim Wilson & Associates), New Park sales traffic for those opportunities has increased as the 2020 buying season gets underway.
