The first half of 2013 has many believing the economy is back from the brink of disaster and good times lie ahead. unemployment is closing in on pre-recession levles, the Fed has announced it wil taper off its strategy of quantitive easing, the stock market is flirting with all time highs and the residential housing market is seeing more demand than supply for the first time.
As builders start to ramp up new construction, the lag in supply is putting upward pressure on housing prices and sellers are entering the market at increased asking prices. The ccommercial real estate market usually follows th eresidential market and has begun to pick up steam, but slower rate than residential.
Although the number of sales in Grand Traverse County have remained consistent with the past two years (and are up from the 2009 & 2010 lows) the average sale price and asking price are the lowest they have been in the past decade. The most likely reason for this is that sellers of higher priced properties had decided to hold onto their property until the market stabilized and they were able to realize full value of their properties again. Assuming the commercial trends follow the residential, we should see many of these properties return to the market in the next 12 months and notable increase in asking price and sale price.
The firsthalf of 2013 has also been the period where one local company that had a large commercial proerty portfolio removed all of their listings from th eMLSand the bank that held the mortgagtes completed a foreclosure on these properties. The bank is in th eprocess of putting the properties back on the market, but this is a large enough portfoloi to skew our statistics for the period. Although bank owned property sales have gone done on a national level, these listings could lead to an increase in sales of bank owned properties on a local level.
Many people feel the fundamentals of a sustained recovery have yet to be demonstrated, however our economy is often driven more by perception than reality. That being the case, the increase in consumer confidence could be enough to drive economic gains tha tlead to an expanding economy. Trends for strong real estate slaes continue and we may even see increase in cap rates if interest rates continue to rise.
Dan Stiebel, CCIM