As we begin 2016, the US economy will have been in expansion mode for six and a half years. There are many signs of prosperity, including notable job creation and robust recoveries of the stock and real estate markets. Despite unprecedented monetary stimulus, the economy is still unable to sustain velocity. Instead, Gross Domestic Product (GDP) growth remains locked in a narrow 1.5% to 2.5% range. The longer the economy remains in this low-growth, low-inflation environment, the more susceptible it is to supply, monetary policy or financial market shocks that could change the economic growth path.
As in our previous annual US Real Estate Market Outlook documents, we will outline our three planning scenarios in exhibit 1. Our Base Case is our most likely scenario. The Upside and Downside scenarios engage our Strategy Team in discussions around reasonable performance expectations that are consistent with our given economic assumptions and alternative outcomes.
Source : UBS AG