Categorized | Commercial

Low Economic Growth Hurting Commercial Real Estate in the United States

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The faltering economy of the United States is starting to once again take its toll on commercial real estate properties. With job creation numbers steadily declining, and the economic outlook pointing to signs of a double-dip recession, the commercial real estate market forecast has been downgraded nationwide.

Retail properties are expected to suffer the most, as people are less likely to spend money when the job market is in an abysmal state. There is no clear indication as to whether the recent predictions of a struggling commercial real estate market means that property values will sink, or vacancies will once again increase. However, any decline in commercial real estate will further compound the economic woes already faced by the country.

There are some areas and real estate sectors that seem to be the exception to the expected struggles. Miami is a perfect example of an area that has seen its commercial real estate market flourish. With talks of more properties being built in the area, it certainly is not sharing the same struggles that other major cities are facing.

Multifamily houses are also expected to continue performing well on the market. Many families are shying away from buying a new home due to the poor job outlook, and thus, they are renting. With more and more people renting instead of buying, the demand for multifamily homes has increased substantially. Vacancies in multifamily homes are hitting very low levels, which is causing an increase in demand, as well as monthly rent.

 

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About James Pattric

James writes for the Residential category (along with Josh Johnson) and also heads up the Resources category.

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