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Commercial Real Estate Transactions Are Falling

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Meandering

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Real Estate Agent or Broker
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Janet Yellen said the other day that commercial real estate is being substantially over valued, and, and, and,

Sept 2016
On the markets, Yellen said that while financial-asset values are not out of line with historical norms, "of course we are worried that bubbles could form in the economy." She singled out commercial real estate as something that has caught the Fed's attention.
http://www.businessinsider.com/janet-yellen-press-conference-september-2016-2016-9

June 21, 2016
The Federal Reserve warned that prices in the commercial real-estate market may have run up too far too fast. Valuations in commercial real estate “appear increasingly vulnerable to negative shocks, as CRE prices have continued to outpace rental income,” the Fed said in its semiannual Monetary Policy Report to Congress. The Fed noted that prices exceed their pre-crisis peaks by some measures.
http://www.bloomberg.com/news/artic...rabilities-building-in-commercial-real-estate

Sept 2015
Another Bubble Is Back——Commercial Real Estate...


Sep 23, 2015 ... It is yet another reminder that Janet Yellen and her merry band of money .... Commercial property prices in the US rose 1.1% in August from July, and ... “ While commercial real estate values have continued to move higher



Won't have anything to do with bond theory and alternative investments, now would it?
How about artificially low interest rates?

Naw

Couldn't be,

.
 

TJSum

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Nov 12, 2007
Professional Status
Certified Residential Appraiser
State
Maryland
I am starting to see signs of a market change in the residential market as well, especially at the high end (after 5+ years of recovering prices). The slowdown is only in certain segments of the DC area market, but it was the same areas that fired the first warning shot 11 years ago.
 

Meandering

Elite Member
Joined
Feb 26, 2006
Professional Status
Real Estate Agent or Broker
State
Pennsylvania
Watch the stock market tomorrow.

Today's sell off seems to be continuing in the Asian markets and Australia, but it's early in their trading day.
 

A K

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Jul 31, 2013
Professional Status
Certified Residential Appraiser
State
Maryland
I am starting to see signs of a market change in the residential market as well, especially at the high end (after 5+ years of recovering prices). The slowdown is only in certain segments of the DC area market, but it was the same areas that fired the first warning shot 11 years ago.

Really? Can you be more specific as to what you are seeing? I am seeing that outside of the beltway has been soft/stable since 2013/2014 but in DC prices still increasing with supply at low levels.
 
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A K

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Certified Residential Appraiser
State
Maryland
xxxxxxxxxxx
 

TJSum

Elite Member
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Nov 12, 2007
Professional Status
Certified Residential Appraiser
State
Maryland
I agree, inside the beltway is still hot. I am seeing some pull back at the high end in Anne Arundel and eastern Montgomery Counties. I did a million plus home in Silver Spring last week, there was over one years of supply of high end listings in eastern MoCo. The only homes receiving offers were at huge discounts. Same thing with the higher end homes in Anne Arundel. Even at mid price levels, my listings many times now are coming in equal to or lower than sales sold over the spring and summer. Typically there is a pull back during the winter months, but it started much earlier this year and seems to be similar to the signs I started seeing in 2005 in certain areas. DC is still hotter than ever as well as many sections of Howard County. PG county is hot, but it was late to the recovery party, so it is still trying to catch up. It just seems the market sections that were first to get the memo of a "correction" ten years ago, are starting to act in that same fashion again.
 
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A K

Elite Member
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Professional Status
Certified Residential Appraiser
State
Maryland
I agree with you. The high end is not as bullish as the low end. Where i first noticed the price declining sharply last time was Germantown. And then it was like dominos with closer in neighborhood declining. Prices in Germantown never really recovered and are still pretty close to lows.
 

A K

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Professional Status
Certified Residential Appraiser
State
Maryland
The only place I am seeing the high end do well right now is 22101 McLean.
 

TJSum

Elite Member
Joined
Nov 12, 2007
Professional Status
Certified Residential Appraiser
State
Maryland
The high end homes are always the first to get the memo of a market change. The worst markets are the condo projects that lost their FHA approval, they have been circling the drain for over ten years now, FHA screwed up with that policy decision, instead of a small percentage of units in any one project being in trouble, with that decision they brought the vast majority of unit owners underwater making the problem ten times worse.
 
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