American financial crisis is now global. Property market in U.S. will take some more time to see the light. Commercial property markets are taking more hit. Office vacancies are rising across the country. Though sale prices and the number of properties sold have plummeted with the deteriorating credit markets, as they have nationwide, the metro commercial-sales market was still one of the most liquid in the U.S.
Companies are cutting costs wherever possible. Entire development team is laid off in a Seattle company few days ago. Some companies are terminating the leases of big offices and moving to smaller offices. Startups are moving back to the garage. It’s estimated that 10 million square feet of office space will be back on the market and office rents could decline by as much as 25% in the next 12 months.
Many real estate analysts expect jump in foreclosures of commercial properties in the next 3 months. It looks like that low interest rate environment is not helping much when there is so much fear.
[...] gloomy data today showed that foreclosure rate is up 25 % year over a year. We wrote about real estate slowdown few days ago. Today’s data reinforces our point of view. It’s going to get uglier before the [...]
I’m very concerned about the global market. Thoughts?
It’s getting worse in many parts of the world especially in Europe and U.S. Asian markets are ok for now. It may change dramatically once the cash pool dries up. We already see slowdown in infrastructure projects in India and china because foreign investors fled the market due to cash crunch. Many billion dollar projects are put on hold in India. It will have spillover effect in entire real estate market. Other Asian markets such as Thailand, Indonesia also foresee drastic slowdown in real estate.
[...] Related Link: Worst is yet to come… for Real Estate [...]