Economists predict commercial real estate outcomes

On Behalf of | Nov 13, 2017 | Commercial Real Estate |

Commercial real estate trends in 2018 may influence how California residents or others choose to invest their money. According to the chief economist for the National Association of Realtors, the overall outlook for commercial real estate in 2018 is positive. However, there may be a bit of a deadlock between buyers and sellers in some cities. This is because landlords and sellers will want higher rents or purchase prices because of the economy’s overall health.

Conversely, buyers may note that rising interest rates may make it harder to justify those prices. Another economist mentioned that tax cuts alone may not necessarily do much for economic growth. While there may be a short-term boost from lower taxes, it could create a longer term drag on the economy. That may eventually play a role in commercial real estate prices. It was noted that adding workers and increasing productivity generally do more for economic growth than tax policy alone.

Multifamily homes may see some weakness in coming years. This is because there is more supply than demand, and it is also because there may be fewer renters in the future. Furthermore, the number of people at their peak renting age may begin to fall in the next couple of years, which could further dampen demand for such properties.

Title disputes or existing liens may cause issues for those who are looking to invest in a commercial property. Therefore, it may be a good idea to do diligence prior to buying a property to reduce the odds of those or other problems arising. It may also be worthwhile to contact an attorney if a dispute does arise. This may make it easier to resolve the matter in a way that may preserve an investment and its ability to generate returns.

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