Commercial Real Estate: Navigating The Changing Season
Savvy, experienced commercial real estate investors know that that changing seasons can have a notable impact on real estate data and trends each year. This is what gives them the edge over the inexperienced who are blown around by sensational headlines.
US real estate in general experiences a sizable fluctuation each year as back to school season ends. Residential buyers and renters are locked down for the year. Many are beginning to figure out how to pay off credit card bills from recent moves and summer vacations. Though there may be some boost for retail which benefits from back to school shopping, and furnishing new apartments and homes. As the weeks progress, home prices tend to soften, and sellers and agents are more willing to cut deals. The residential market generally doesn’t see a rebound until the end of year holiday season. Again, retail typically gets an early boost as Halloween, Thanksgiving, Black Friday, and Christmas sales start to kick in.
There are several bigger factors coinciding with this change in seasons this year. The first is the recent hurricanes. While the Tampa, FL area may have been less impacted by recent natural disasters than others, there is still a local effect. Housing, and especially multifamily rental housing and hotels are definitely more in demand as numerous families from other cities remain in temporary shelter or need new arrangements.
Then there is the Equifax hack. It may be quite some time before the real fallout is seen. Yet, this could also cause some fluctuations in real estate and retail data. It may take time for some to adjust to credit damage, and there could be identity theft issues which cause the need to re-state some sales figures in the future.
Then there is the rising interest rate environment, and fear of a looming stock market crash. Both of which are giving investors a greater sense of urgency to refinance or expand commercial property investments.
It is important for everyone to understand that there are seasonal fluctuations in the real estate market. This year there are a variety of additional dynamics to factor in. For some it will mean selling is a smart move. For others, this will present a tremendous season for capitalizing on new opportunities, at what may be the best prices and returns they’ll be able to lock in for a while.