What Can We Expect in 2019?

These recent years have been good to commercial real estate.
Things have improved considerably in so many geographical areas since The Great Recession, but what does the future now hold for us? We know that the economy and the real estate markets will come and go in cycles, so what does our crystal ball now tell us is on the horizon?

One of the first warning signs of a change within a good real estate market is when we observe buyers starting to be more particular about the prices they’re willing to pay.

They’ll begin kicking the tires more, and wonder if what the seller is asking is really what they should be paying for the property. But when the market was heating up, and there was great anticipation that if you purchased a property right now, you’d immediately begin riding the gravy train of upward appreciation, people were sometimes even willing to pay full asking price.

But what about right now, when that anticipated appreciation doesn’t seem to be as solid as it was just several years ago? Well, now some of that excitement can dissipate within buyers, and they’ll want to buy the property for a lower price.

The great news is, generally speaking, that good financing is still available to purchase commercial real estate. But then again, the buyers are now more likely to want to purchase real estate for better prices. So then when you combine this with the recent volatility within the stock market, and many people thinking that stock values have been overpriced, we now have multiple signals that economic change may be coming.

With this in mind, one of the greatest mistakes that real estate principals can make is lulling themselves into complacency, and thinking that a good real estate market will now always continue. But history has shown us that when the passion of buyers begins to cool down, that this now signals the beginning of a transition, and then it’s only a matter of time until we feel even more of a slowdown.

So with all of this in mind, if you’re someone who wants to sell your property at or near the top of the upswing within this real estate cycle, now would probably be a good time to do so. But then again, if you’re someone who plans to hold onto your property through any economic downturn, then now would be the time to stand pat.

So in putting all of this together, now is the time to make sure that you have good tenants in place within your properties. No one can say for sure when we’ll feel the full impact of the next economic downturn, but it’s likely that we will see an even greater transition within our local real estate market by the end of the year.