Categorized | Commercial

Commercial Real Estate Prices Level Off

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After a strong rebound over the last two years, it appears that commercial real estate prices are starting to stagnate. Prices had almost hit their record highs in a variety of the commercial real estate sectors, including retail shopping centers, office buildings, apartment buildings, and warehouse facilities.

One of the reasons why the growth within the commercial real estate market has come to a halt is the increasing fear that the economy might hit another road-bump in the coming months, making it difficult to profit through property ownership. On the other hand, the current low interest rates have helped keep the commercial property market from entering into a freefall state.

In states like California, the commercial real estate market varies from city to city, and region to region. For example, Southern California has seen its commercial real estate market struggle in comparison to the rest of the country. On the other hand, the Bay Area continues to have a thriving commercial real estate sector.

The apartment commercial real estate market has remained the strongest of the various sectors over the last two years. With the housing market struggling and more families opting to rent, it should come as no surprise that apartments are exceeding expectations across the board.

While pricing stagnation in the commercial property market is certainly better than a decline in pricing, it has left analysts, property owners, and real estate agents all moderately frustrated. In general, if prices are going up, it is typically easy to understand why. The same can be said for when prices are on the decline. However, when prices stagnate, it is difficult to find a true reason, and even more difficult to commit to making a change to try to improve the numbers.

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About Drew Wilson

Drew focuses on the Commercial and Mortgage/Finance categories.

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