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July 31, 2019

Is The Yield Curve Foretelling a Downturn?
By Kelsi Maree Borland

As we move deeper into the cycle, industry leaders are looking for potential signs of a recession, and one emerged: The 10-year/three-month yield curve has inverted. Historically, a yield curve inversion is one of the signs of an oncoming recession, and while it is only one metric, it is enough to encourage some developers to make strategic adjustments to hedge against a downturn.

“We are working to anticipate future changes in the market using a robust set of tools, and those tools are starting to give us some indication of market drift," Scott Choppin, founder of Urban Pacific Group of Cos., tells “We are just trying to be as effective as we can in the management of our real estate development, and we are looking for indicators that affect the multifamily market place. The tools facilitate the design of our strategy, and they include rent levels and rental demand, supply and the demand for that supply and the BaR Grid analysis, and the yield curve is one of the variables in this tool." Read more.

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