No, we're not Gallup or Zogby. But given the widespread interest in this year's U.S. presidential race, the 2005 NREI/Marcus & Millichap Investor Outlook survey asked respondents which presidential candidate they believe would have a more favorable impact on commercial real estate.
An overwhelming majority of the 648 survey respondents view George Bush more favorably than John Kerry on several economic factors tied to commercial real estate. For example, respondents indicate Bush would have a more favorable impact on interest rates than Kerry, 67% vs. 22%. On the issue of taxes, an overwhelming majority said Bush would have a more favorable impact than Kerry, 75% vs. 15%.
“Eighty percent of executives are Republican-leaning,” says Dr. Rajeev Dhawan, director of the Economic Forecasting Center at Georgia State University. “Bush's tax cuts were designed for this strata as well as for small businesses. Thus, there is no surprise.”
Doug Duncan, chief economist for the Mortgage Bankers Association, agrees. He says the business sector — particularly entrepreneurs — has assessed Kerry's Senate voting records and past statements. “[The business sector] has noted that Kerry favors governmental rather than private solutions and favors shifting more of the tax burden to upper-income groups, which is where the entrepreneurs tend to be,” says Duncan.
Not only are the respondents to the NREI/Marcus & Millichap survey high on Bush, they're equally as bullish on the near-term prospects for the economy. Nearly two-thirds of respondents indicate the economy will be stronger a year from now despite ongoing concerns about anemic job growth in the U.S. and geo-political tensions (for complete survey results, please see insert).
“Why are they optimistic? These [investors] are born optimistic like habitual gamblers,” says Dhawan. “They can see no wrong, do no wrong, and when they place big bets and win big even once, it keeps them going.” It also helps that interest rates remain low enough to enable investors to place their bets with minimal downside.
When asked to cite their top concerns, unforeseen shocks to the economy ranked No.1 for the second consecutive year. In fact, 62% of investors ranked it as a concern this year, up from 37% last year. Based on a number of write-in responses we received to that question, the threat of terrorism remains a big concern.
“If you conducted this poll last year at this time, the thinking was that the war in Iraq had turned out to be easier than expected,” says Dhawan. “Since then, Iraq has been in turmoil, and Al-Qaeda's attack in Spain, combined with the recent mayhem in Russia, has made people nervous before the November elections here.”
If you have any questions about the survey results, please e-mail me at [email protected]. I'd like to hear from you.
A Clear Majority Believe the Economy Will Be Stronger a Year from Now
Do you believe the economy will be stronger, the same or weaker 12 months from now?
| Stronger | 63% |
| The Same | 28% |
| Weaker | 8% |
| No Answer | 1% |