Home prices are presently on the rise. With the election finally coming to a close soon, international companies are seeking to make their mark in the United States travel sector. Starwood Capital Group Chairman and CEO Barry Sternlicht said this month that he is bullish about the future of the real estate market. Sternlicht stated to CNBC that his company’s broad reach across the real estate space — with hotels, apartments and malls in the United States and abroad — enables him to view the market on a broader scale.
“I think you can see acceleration in spending, incomes are rising,” Sternlicht said. “I’m seeing that real estate markets, in general, have never been better in the United States. On CNBC’s “Squawk Box” Sternlicht had also stated that the rising prices of apartments and single-family homes were major contributors to the real estate market’s success. He also said on the interview that some of the more major U.S. markets were buckling, taking a backseat to more up-and-coming cities like Seattle.
“We are seeing flashing yellow lights on affordability. People who are currently renting and want to convert into ownership — major difficulty,” said Lawrence Yun, chief economist of the NAR. “Home prices are rising way too fast compared to people’s income and wage growth.”
“There are more cranes in Seattle downtown than any city in the country, more than San Francisco and New York combined,” Sternlicht stated. Markets in cities such as Nashville, Portland, Atlanta and Denver are also seeing significant growth.
“The tight supply of homes on the market continues to constrain sales, while low mortgage rates and job growth help fuel healthy demand. This results in a pressure cooker effect, and the market’s traditional pressure release valve — new home construction — isn’t helping much, given that new home sales are running more than 40 percent below historically normal levels,” wrote Andrew LePage, research analyst at CoreLogic.
In response to Blackstone’s deal with Chinese travel conglomerate HN, Sternlicht replied, “I think for many of these Chinese lifestyle companies and travel companies, this is diversification, this is a currency hedge in case they continue to have to lower the currencies against the dollar because of the slowing growth at home,” Sternlicht said. The sheer number of Chinese customers who travel make deals like Blackstone’s reasonable, if not attractive, for Chinese companies, he said.
“I think the economy might surprise us,” Sternlicht also said in the interview. “Post the election, I think you might see companies take a more aggressive stance on spending their capital, building their plants and hiring, and the wages are going up.”