U.S. MarketFlash
04 Nov 2020
The U.S. presidential election remains undecided, largely due to the high number of mail-in votes amid the pandemic. Five states will likely decide the winner of the presidency: Georgia, Michigan, North Carolina, Pennsylvania and Wisconsin. These votes likely won’t be fully tabulated for several days. Should the results be contested in court, the official outcome could be delayed further. Nevertheless, the uncertainty of the election is not expected to materially impact near-term macroeconomic conditions.
The outcome of several pending Senate races will determine the extent to which certain issues impact commercial real estate. Should the Republicans retain the Senate as expected and Biden wins the presidency, policies that the executive branch can put into effect independently, such as global trade and regulation, will take precedence. Fiscal stimulus likely will be more limited ($1 trillion or more) should the Republicans hold onto the Senate, though it could be more if Trump wins reelection. Should Democrats take control of the Senate under either Trump or Biden, a COVID recovery package likely will reach and possibly surpass $2 trillion. A Democratic Senate along with a Biden win could result in major legislative action affecting federal spending, taxes and health care.
Pennsylvania ballots postmarked by Election Day can be counted until Friday. As such, CBRE will be closely monitoring results for impacts on property markets and will weigh in with additional analysis once results are finalized.
Regardless of elections results, CBRE expects economic growth will slow in Q4 2020 before a strong recovery takes hold in 2021 with expected GDP growth of 4.5% for the full year. Recovery of property market fundamentals will be increasingly apparent in the second half of 2021.