Commercial property values were grossly inflated in the decade because, I believe, because of the infusion of " easy money." Wall Street loot was available just about for the picking.
To the delight of many former sellers, many buyers: overpaid, appraisers: over-valued, bankers: over financed and media: over applauded. It was NEVER suppose to end.
In the past decade, some rather well healed "speculators" disguised themselves as "real estate investors" and wrecked havoc on the local, regional and national markets.
Any damn fool could, and did, overpay for commercial grade investment real estate.
These wiz kids overpaid for shopping centers, strip centers, office buildings and hotels.
These same wiz kids drove prices up and up everywhere. Many normally rational property owners actually believed that their properties were worth 2x and even 3x times what they paid for them.
Naturally many real estate agents listed grossly inflated properties for sale! They either forgot or NEVER knew that real estate foundational principals can't or should not be ignored.
But many savvy investors looked and walked away from the insanely high prices asking prices.
And now "prices" are dropping. Moody's Commercial Property Price Index just posted large declines. The index is 21% off its October 2007 peak.
Investors: your time is approaching. I excepect that soon we'll see so distressed commercial proeprty sales hit the market. Many speculators will flop rather than flip for riches.
Bill McInerney
BUYING OR SELLING? CALL BILL MCINERNEY, Realtor, at 617 816 3933
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