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Is the Bottom of the Commercial Real
Estate Market Getting Closer?
The
residential real estate market is getting a lot of media coverage. But what
about the commercial real estate market? When will it hit bottom?
No one can predict the future. However, professionals can certainly evaluate
historical trends and make educated estimates about what might happen next.
Data show us that commercial real estate trends often lag behind residential
trends by around 18 months. The recent residential peak was in 4th quarter,
2005. The subsequent commercial real estate peak was in 1st quarter, 2007.
That was the peak. What about the trough?
According to the Orlando Regional Realtor Association, the area residential
market is improving. The number of residential properties sold hit a low in
December 2007 with 900 new contracts that month. In April of 2009, there were
5,818 properties that went under contract.
Applying the same 18-month trend, can we forecast that the commercial market
should start to bottom out in the third or fourth quarter of 2009?
What does that mean for you?
Now is the time to make smart decisions about buying commercial properties.
Prices are extraordinarily low. Financing is also extraordinarily
affordable. Commercial rates in May were as low as 5.69%.
Bottom line: Now is the time to buy. When you consider the future value of
hard assets such as real estate, it is hard to find a better place for your
investments.
Charlie Brenner, CCIM
President of C. Brenner, Inc.
Commercial Real Estate Broker in Central Florida
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