Confidence in Commercial Market Is Growing
Despite a slow turning economy, commercial practitioners believe the commercial real estate market is not only better off than it was a year ago but also will continue to improve. During the Realtors© Midyear Legislative Meetings & Trade Expo, many commercial Realtors© were polled for their thoughts on commercial real estate trends.
National Association of Realtors© chief economist Lawrence Yun joined several Realtor© commercial practitioners on a panel to discuss the economy and regulatory issues and their impact on commercial real estate market trends. Through a live polling of the audience, a majority of members expressed that their local economy is either a little better or showing a major improvement from a year ago.
“Right now we are experiencing a unique recovery phase,” said Yun. “Those in the high income brackets are seeing much improvement in the economy, particularly related to stock market wealth. However, those in lower income brackets are not seeing any growth in their income. Commercial real estate is dependent on the American economy and with an uneven recovery the market still has a way to go before a full recovery.”
Yun reported overall transaction volume in the commercial real estate market is slowly improving and that property sales are rising. In terms of markets, New York City continues to top the list in sales volume; however, Yun pointed out smaller markets like Seattle and Austin are also experiencing significant year-over-year improvements. This indicates that large investors are more willing to purchase in midsize markets.
NAR commercial members typically handle small transactions of one million or less and Yun reported that these sales are starting to improve. “While the prices for deal sizes most frequently handled by Realtors© have not yet stabilized, we have recently seen a positive upturn in sales volume,” said Yun.
Yun also said the multifamily sector has continued to rapidly gain market share at over $84 billion, while the office space sector remains closely behind with over $77 billion. Yun suggested the apartment sector might be facing a potential mini-bubble. “A bubble for the apartment sector is not out of question,” said Yun. “Apartments are in high demand and multifamily financing is easier to obtain.”
Fifty-eight percent of the polled audience reported they believed the commercial real estate would improve in 2014. Yun echoed that sentiment and said that improved confidence among business owners could help improve the economy.
“What is lacking for a stronger economic growth is confidence,” said Yun. “Our Realtor© members are feeling a little better and that sentiment will hopefully translate to a better market soon.”
Source: National Association of Realtors©, realtor.org
If you would like to suggest a topic for inclusion in one of our future email newsletters, contact us today! We look forward to hearing from you.
FIND THE PROPERTY YOU NEED.PROPERTY SEARCH
CONTACT US TODAY
Featured Real Estate Listings
- Residential 9476 Newbridge Dr,
Potomac, MD 20854
ENTERTAINER'S DELIGHT! Stunning 2 acre lot located in sought after Falconhurst. Spectacular, private yard features newly renovated pool, pool house w/ FB, tennis courts & beautiful sun filled patio. Enjoy the spacious kitchen, formal living & dining rooms,1st floor office, fin bsmt, storage & 3 car garage. Two story family room features over sized windows & offers scenic views of the backyard.VIEW LISTING
- Residential 23400 Woodfield Rd,
Gaithersburg, MD 20882
Mitchell & Best Home on gorgeous 2+ acre lot in Watkins Preserve - a subdision offering 5 additional lots! 5,700 SF (3,934 fin above grade) incl. 4 bdrms, 3.5 baths, 2 car gar, & a full W/O bsmt. 1st fl features office, formal liv& dining rms, gourmet kitchen w/ cntr island, brkfast area & lg family rm w/ FP. Enjoy the gorgeous sunset views from the spacious deck!VIEW LISTING
- Lot 11013 Riverwood Dr,
Rockville, MD 20854
GORGEOUS 2+ acre lot in heart of Potomac. At the end of prestigious Riverwood Drive, this lot is on a cul de sac. Public water & sewer & gas available. Enjoy all that Potomac has to offer: Potomac Village features shops, restaurants, supermarkets, Starbucks and more! Outdoor enthusiasts will love Swains Lock & Great Falls Park. Country Clubs, equestrian facilities,& sought after schools nearby.VIEW LISTING