Notes from the CCIM Forum: Three Voices on the 2026 Market

Part 2 of HAYLEN's series on the 2026 CCIM Spring Forum in Philadelphia

Part 1 was about Michael Litt's keynote and how a senior global investor reads today's market. This week we're picking up the Economic and Advocacy Lunch, where three very different speakers gave their read on the year ahead back-to-back.

The cast: Shruti Mishra, US economist at Bank of America. Kevin Fagan, Head of CRE at Moody's Analytics. Shannon McGahn, Chief Advocacy Officer at the National Association of Realtors. What made the hour useful wasn't the polish. It was the difference in how each speaker reads the same market.

Here's what stayed with us, translated for clients and friends of HAYLEN in Silicon Valley, the Bay Area and Southern California.

1. The economy keeps absorbing shocks. That changes how to plan.

Mishra opened with the line we keep coming back to. After the Liberation Day tariffs landed in April 2025, every economist on television was forecasting a recession. The US still grew roughly 2% on the year.

Her base case for 2026 is roughly 2 to 2.3% growth even with oil sitting around $90 for the rest of the year, even with the Iran war as a live overhang. What's holding the floor: continued fiscal stimulus from the One Big Beautiful Bill that passed in July 2025, a World Cup spending bump, AI capital expenditure that hasn't blinked at the geopolitical noise, and a US consumer that, in her words, "finds a way to spend."

The point isn't that nothing can go wrong. It's that the economy has now demonstrated, twice in five years, that it can take a hit and keep walking. For most of our clients, that argues for plans built around base cases, not headlines.

2. The K-shaped consumer is the story underneath the aggregate.

Aggregate spending looks fine. Underneath it, there are two consumers.

The high-end consumer is supported by a stock market sitting near all-time highs. Bank of America's internal card data shows their non-gas spending hasn't pulled back. The low-end consumer is exposed to gas prices in a way the higher-income consumer isn't. Mishra called gas an "indiscriminate" tax. A bigger share of a lower-income household's budget goes to fuel, so the same $90 oil that's a footnote for a Bay Area tech executive is a real squeeze for a service worker in Bakersfield.

For our markets, this shows up in two specific places: the buyer pool for entry-level inventory, and rental demand at the lower end. Both are worth watching. Neither is in crisis.

3. Mortgage rates aren't really about the Fed.

Mishra's metaphor of the day. The Fed is a parent with two kids running in opposite directions. The labor market is the kid in the backyard, slowing but still inside the fence. Inflation is the kid in the street.

Inflation has been stuck about a percentage point above the Fed's 2% target for nearly three years. In a year where oil is up and supply chains are getting bumped, the Fed's job is to keep that kid out of traffic before turning to anything else. Her base case: roughly 50 basis points of cuts later in 2026, toward a neutral rate near 3%. Not a deep easing cycle. Not zero. Somewhere in between, and slow.

Then she said the thing we want clients to hear. The popular assumption right now is that political pressure on the Fed leads to lower rates. The actual mechanism runs the other way. If markets begin to perceive that rate cuts are coming from political pressure rather than economic data, the long end of the curve — which is where 30-year mortgages live — moves up, not down. Markets price the loss of credibility into longer-dated yields. You can have a Fed cutting short rates and a mortgage that won't budge.

For buyers waiting for relief, the conversation is partly with the Fed and partly with the bond market.

Rates change daily. Talk to your lender about what your actual rate looks like.

4. There is no longer a national CRE story. There are only submarket stories.

Fagan opened with a chart showing cap rate dispersion at the submarket level wider than at any point in his data series. National averages, in his framing, are now hiding everything that matters.

A few of the numbers he cited:

• Office. San Francisco's Van Ness corridor down roughly 67% peak to trough. Marin up about 6% over the same window. Tech leadership wants offices near home, not downtown. DC shows the same pattern.
• Industrial. Assets within 20 miles of a port still hold. The Inland Empire moved from sub-1% vacancy to 7-8% in roughly three years. Same asset class, very different stories.
• Retail. Chicago's Magnificent Mile down about 44%. Suburban grocery-anchored centers barely moved. The driver isn't foot traffic. It's fulfillment viability - whether the building actually supports omni-channel returns and pickup.

His takeaway, which we agree with: this is no longer an "I'm allocating to multifamily" market. Submarket-level underwriting is the only kind that works. For our investor clients, the framing matters as much as the math. Treat the building as a building, not as an asset class.

5. Affordability is now four things, not three.

McGahn said something we've been saying internally for two years. The old framework for affordability - interest rates, inflation, inventory - is incomplete. There's a fourth pressure, and it's insurance.

The numbers she shared:

• One California operator saw premiums rise 400%.
• In several markets, insurance now exceeds principal and interest as the largest line on the monthly carry.
• Some insurers are requiring tens of thousands of dollars in mitigation work to be completed before a contract can even be signed.

For HAYLEN clients, this changes how we underwrite a home or a multifamily building before the deal goes under contract. We're now pulling indicative insurance quotes early in our buyer-side workflow. If you're considering selling and you haven't reviewed your insurance file in the last 18 months, that's worth a conversation with us before pricing the home.

6. The other lock-in effect: capital gains thresholds were never indexed for inflation.

This one quietly affects long-tenured California homeowners more than almost any other policy on the table.

The capital gains exclusion on a primary residence ($250,000 for single, $500,000 for joint) was set decades ago and has never been adjusted for inflation. After the run-up in California home values, a homeowner who bought in the 1980s or 1990s now faces a tax bill on the sale that simply didn't exist when those rules were written.

McGahn called it a different kind of lock-in effect, separate from the rate-driven lock-in everyone discusses. NAR is working on indexing those thresholds. We don't know when or whether that happens. We do know it's the right policy fix.

If you're a longtime owner thinking about a sale and worried about the tax bill, please bring us in early. There are scenarios where the answer is "not yet" and others where the answer is "yes, but here's how to structure it."

This is not tax advice. Talk to your CPA.

What we're taking from the room

A few things settled in for us after the lunch.

The macro picture is steadier than the headlines suggest. 2% growth is a workable backdrop, not a crisis. The Fed is on hold for credible reasons, and the cuts that do come will be modest.

The CRE picture is no longer one picture. It's hundreds of submarket pictures. The clients who do well from here will be the ones who underwrite at the right level of zoom.

Affordability now has four moving parts, not three. For many of our clients, insurance is the variable that's moving the most right now - and it's the one most often left out of the plan.

This is the second post in HAYLEN's CCIM field notes series. Future posts will pick up the Sun Belt versus coastal markets discussion, and what was said about residential supply that didn't make it onto anyone's slide deck.

If you'd like to talk through what any of this means for your own plans, we're here for it. Schedule a free consultation with us.