Categorized | Commercial

United States Commercial Property Sector Becoming a Bear Market

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The United States commercial real estate market has grown more bearish over the last few months. According to experts, many investors believe that the overall outlook for the commercial property sector is it will fully establish itself as a bear market in the near future.

Many investors cite a lack of confidence in the United States government to resolve the current and pending crisis situations that exist in both the job market and the real estate market. Seventy percent of investors are anticipating a bear market, and have thus changed their strategies accordingly. That number is up over ten percent from last year.

Many of these bear investors believe that the commercial market has become almost a mirror image of the economy in the United States, as it has failed to gain any kind of momentum in terms of price and sales growth. Furthermore, the lack of overall consumer and homebuyer confidence has led many to delay any home buying decisions until more certainty exists within the market.

Commercial real estate prices hit their highest point in 2007. Since then, they have fallen more than forty percent. Even with mortgage and commercial lending rates at record lows, there has actually been a decline in the number of loan applications and approvals. Investors cite increasingly stringent lending standards imposed by the banks as being one of the detrimental issues affecting the commercial property market.

The most attractive commercial property option for many investors continues to be that of multifamily housing. With more people looking to rent instead of buying a home in the current market, the multifamily housing market is expected to continue to buck the trend, and expand upon its growth.

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About Drew Wilson

Drew focuses on the Commercial and Mortgage/Finance categories.

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