Originally Published July 11, 2017
The summer is upon us. The first 2 quarters of 2017 have been active on all fronts and I’m sure many others have been focusing on developing business in this active point in time.
Forecasts show expectations of increased growth in the underlying demand for real estate, which could be linked to the continued economic expansion that is maintaining strength. Leading economic indicators are mostly pointing positive on a national level with the only weak points continuing to come from housing permits and average manufacturing workweeks.
Trends We’re Seeing in Summer 2017
Employment trends seem to continue their consistency as well and even though this summer is stronger than usual in many markets that typically see a considerable slow-down, the monthly numbers are still below prior 12 month averages, and wage growth is the weak point. It’ll be interesting to see how the employment reports look as the year progresses.
Investors are still looking for value-add, and some sentiment-survey results indicate the current administration could create additional growth opportunities even at a time when historical trends based on time-length of recovery push the envelope. Joint-Venture scenarios could be the vehicle of choice in real estate development at this point in the cycle where demand still shows a need for product, but land prices are increasing beyond what developers can buy supply at and construction costs are up due to labor costs rather than materials. Because costs can be shifted in a joint-venture structure, it could allow markets to grow enough where landowners, developers and users can all benefit.
At the end of the day, the Fed is raising rates and seems to continue to do so because of a strong economy rather than worrisome inflation pressures. That’s a telling fact that provides confidence in the markets, and also indicates that rates have been baked into how investors look at the markets. Even if we start to decline from this peak market, the perspective of slowing down could be countered by the fact that any decline would still take us to a point in pricing and expectations that are higher than long term averages, so where is the perceived risk?
Call Fortress Commercial Real Estate, so we can talk expert advice on where your real estate strategy should be focused in West Central Florida. Fortress Commercial Real Estate adds value to business owners looking to grow through their real estate, office and building needs.
There’s an elephant in the room we want to talk about, Fortress Commercial Real Estate. With more than 30 years of Florida experience and local real estate knowledge. Paying attention to Florida real estate so you can pay attention to growing your business.
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