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Costar reports that high-end Class A multi-family buildings are in high demand in the coastal markets while overall investments dollars are re-entering the marketplace. Those with lots of cash are parking it where it makes the most sense, on the coast where values have been hit hardest. Some real estate principles continue to prove themselves over and over again. Location will always be the most important factor and the best property on the block will always get the most interest. The good news is that the market is rebounding somewhere in our horizon. As demand increases, scarcity drives the piranhas upriver, inland and eventually to the midwest. So there is promise in the news but then you read the next headline that reads $2.3 Billion in troubled [commercial loans] coming due in the next 6 months and pummels the optimistic side of your psyche. That can’t be good for lenders as they try to nurse their bad loan wounds of the past few years and scrutinize all loan applications so that a very small percentage of loans actually get through. In the big picture those who should be lent money are getting loans. The problem remains the not so wealthy folks can’t get loans for single family homes, rehabs, and small commercial & investment grade loans that make the marketplace and employment rates representative of a healthy environment.

On my streets the word is still “desperation”. Anyone trying to sell in this market has to be desperate at some level. Buyers and investors are taking advantage of that fact and getting amazing deals from banks and owners are willing to dump and move on. The single family market continues to perform well in the areas that yield the best products (location & quality) unsurprisingly. There are quite a few for sale signs out there right now and as the commercial market gets hit harder in the upcoming months we won’t see vacancy rates go down. All the markets relate to each other and although some national information seems to be positive we will locally continue to see gun-shy buyers and a very limited amount of new businesses fill our commercial spaces. If the economy does not yield a bustling community of money spending consumers then we all have to wait for the trends of our coastal partners to reach us at a trickling rate. Long short: we have some time to wait before we see our empty homes and retail spaces filled.

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