The Cal State
Companies: Center for Real Estate
Studies ¨
Cal
State Properties ¨ Cal State Investment
LTD Partnership
¨
WHEN
WE COME BACK….
WHEN
WE COME BACK….after this coronavirus commercial
break whoever is our new leader will have to
manage the economy as it restarts in earnest in 2021. Finances have been overextended by the massive
fiscal packages approved so far, and hard choices will need to be made about
whether to push ahead with further stimulus, or to try to constrict spending as
the recovery gets underway. Therefore, we do not believe that tax policy will
be at the top of the policy agenda for either of the presidential candidates
after inauguration. We can imagine that taxes might be gradually used over time
to strengthen fiscal ratios , where the Congressional Budget Office estimates
that the debt-to-GDP ratio may reach 120% over the coming years. In addition,
it is possible that tax incentives will be created to promote a more
sustainable consumer attitude toward
scarce resources. Whether this may hurt earnings or would even support earnings
will depend on the availability of technology to support the ability of
consumers to adopt more sustainable behavior.
.
Calstatecompanies recommends a long-term investment approach,
the temptation admittedly exists to position real estate investments to take
advantage of, or hedge against, potential election outcomes. We caution
investors against doing so at this time, but instead advise them to be ready to
alter their investments as new information arises. One reason for this is that
the election outcome is highly uncertain, and positioning right now for a specific outcome leaves it
vulnerable to the risk of a different outcome, with different real estate market
consequences. Instead, we recommend tactically adjusting real estate
investments to reflect the evolving outcome probabilities and the policies
likely to be adopted in each case. The implied rationale for this approach is
to maintain diversification so that a single outcome does not cause significant
financial agony. In other words, we believe that the elections will have a more
short-term impact on the real estate markets. Consumers adapt to changed
policies over time and enhance their return continuously. Therefore, a diversifying
your real estate investments based on the research reports issued by the
calstatecompanies Market Cycles will give you the information you need
to make sound investment decisions.
ABOUT
THE AUTHOR: Eugene E. Vollucci, is considered to be one
of the foremost authorities on real estate taxation and investing and has
authored books in these fields published by John Wiley & Sons of New York.
He is the Director of the Center for RE Studies, a real estate research organization.
To learn more about the Center, please visit our web site at http://www.calstatecompanies.com
UTUBE: https://youtu.be/868wrjNPQFM
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