We are in a great real estate restructuring at the current time. We have property owners upside down, banks are receiving money from Federal Government, lending guidelines continue to increase, people are getting foreclosed on and commercial is facing its worst cycle since 1991-1992. What are we to do? I am always researching market trends so that I have information to pass along to my investors. Please look at the latest market trends for 2009:
Before a rebound, Emerging Trends says the following needs to happen:
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Private real estate markets need to correct--lenders must force distressed owners to become motivated sellers.
- Debt capital needs to flow--lenders will need to learn to deal in a more stringent regulatory landscape. The commercial mortgage-backed securities (CMBS) market must "reformulate."
- Regulators need to restore confidence in the securities market. The government will insert itself into overseeing mortgage securitization markets. Systemic overhaul promises more measured debt flow.
- The economy needs to improve. Falling demand for space won't affect real estate markets severely until 2009.
- The housing condition is no better and shows no signs of recovering quickly. For lenders, the "subprime mess is the tip of the iceberg." Stricter lending standards and the weak economy will continue to drain the homebuyer market. "Forget the quick fix!"
Best Advice for 2009:
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Investors should sit tight. Opportunities will surface at significant discounts.
- Buy discounted loans.
- Recap distressed borrowers: invest in maturity defaults, construction loans/bridge loans, or take mezzanine positions and equity stakes in properties.
- Invest in publicly-held real estate investment trusts (REITs). They will lead the market's recovery.
- Focus on global pathway markets: 24-hour coastal cities.
- Staff up asset managers, leasing pros, and workout specialists. Separate good assets from bad.
- Retrench on development and reorient to mixed-use and infill. Higher-density residential with retail will gain favor in next round of building.
- Go green. Cutting energy expenses is likely to be a priority.
- Buy or hold multifamily, hold office, hold hotels, and/or buy residential building lots, but be prepared to hold.
- Purchase distressed condos in urban areas near transit.
- Focus on neighborhood retail centers with strong grocery anchors and chain drugstores
Cited from Urban Land Institute web site http://thegroundfloor.typepad.com/the_ground_floor/2008/10/emerging-trens-in-real-estate-2009.html
Please look at the advice given for 2009. This is great advice for realtors and pass this information out to your client database. Best of luck to you in 2009 and Beyond
Make the Call, Set the Plan, Do the Deal$!
Feel free to listen to my Radio Show to learn more about the phoenix real estate market, new trends, and the latest opportunities. The Real Estate and Beyond Radio Show Airs every Saturday from Noon-2:00pm on Conservative Newstalk KKNT 960am in Phoenix, Arizona. You can listent to past shows, or stream on-line.
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