Starting Off 2018 Just Right
Is anyone else surprised it’s February? Commercial real estate is doing well so far in 2018, but what are we looking at for the rest of the year? While we don’t have the crystal ball, commercial real estate industry news resource, GlobeSt.com, interviewed Situs RERC® (Real Estate Research Corporation) President Ken Riggs. Here are his predictions:
Valuation: Riggs concluded that, “Eighty percent of those surveyed said commercial real estate values would remain the same in 2018, while 20 percent predicted they will increase by 1 percent.”
Property values seem to be firm, the economy has been doing well, and financing continues to be available.
Pricing: While prices are stable, they may not be rising as quickly as they have in recent times. While many people may say “So What,” to these predictions, Riggs suggests that such price stabilization (buyers no longer being willing to pay tomorrow’s prices today) could be an indication that a change is in progress. He adds that it’s more likely we’ll experience a downturn before we see prices rising substantially once again.
Lenders: Lenders seem to be confident right now in giving loans, and this is a very good sign. This is because property can be purchased with both good leverage and at reasonable interest rates. This helps to support overall property values, as more people can still get good financing. This keeps them in the market and interested in buying more property.
So, in putting all of this together, as we enter the first few months of 2018, a good term for us to be operating under could be “cautious optimism.” Keep looking for more opportunities, but always make wise, intelligent decisions based upon sound fundamentals.
Alex Rhoten is the Principal Broker at Coldwell Banker Commercial Mountain West Real Estate at 503-587-4777 or cbcre.com.