Santa Ynez Valley Association of Realtors
  • Home
  • Find a Realtor
  • Search the MLS
    • Search the MLS
    • Open Houses
    • New Listings
  • SYVAOR
    • Board of Directors
    • Affiliates
    • Realtor Resources
    • Real Estate Links
    • Continuing Education for REALTORS
    • Ethics Statement
  • Market Trends
  • Valley Info
  • Contact

Commercial market Continues Recovery, Says NAR Chief Economist

5/18/2015

1 Comment

 
Media Contact: Jane Dollinger / 202-383-1042

WASHINGTON (May 14, 2015) – While the commercial market still faces its share of challenges, REALTORS® specializing in commercial real estate expressed confidence in the marked improvement seen in the market over the last year at a commercial economic issues and trends forum at the REALTORS® Legislative Meetings & Trade Expo.

National Association of REALTORS® Chief Economist Lawrence Yun led a panel discussion about the forces shaping commercial real estate markets. The panelists agreed that the market has improved and expressed confidence that continued recovery in the economy will drive commercial real estate growth.

“Commercial real estate usually recovers two years behind the economy; however, NAR members who practice commercial real estate are seeing a three-to-four year wait,” said Yun. “It has been a long and slow recovery, but it is happening.”

However, there are still headwinds facing the commercial sector. Subpar Gross Domestic Product growth, stagnating wage growth and low employment rates are all affecting demand for commercial properties. Improving those underlying fundamentals is instrumental in maintaining a strong commercial market, said Yun.

He said another major hurdle facing the recovery is the lack of financing available for small investors. While large companies can access financing from Wall Street or international buyers, most financing for smaller investors still comes from regional or local banks and credit unions. Many of those small banks are hesitant or reluctant to give out commercial loans.

“New financial regulations for all banks, big and small, are resulting in smaller banks bearing proportionally higher compliance costs,” said Yun. “Why are the little guys taking the brunt of this? Maybe there should be waivers for smaller banks so they can give out the loans businesses need and help with community development.”

Sam Chandan, founder and chief economist of Chandan Economics and associate faculty member at The Wharton School of the University of Pennsylvania, emphasized the importance of the narrative currently happening among commercial real estate investors, especially when it comes to multifamily homes.

“The narrative is that Millennials love to rent; they prefer the flexibility and proximity to amenities that comes with renting rather than owning,” said Chandan. “However, that fails to take into account that while Millennials will always be Millennials, Millennials will not always be in their twenties. You could ask a 22-year old at any point in history if they want to own a house in the suburbs, move away from urban centers, or own a minivan, etc., and they will say no. But that answer has changed in the past and it will change again, and the multifamily sector needs to develop a narrative that takes that into account.”

The same problem is affecting other commercial markets, such as retail. Online commerce has changed the way commercial retail positions itself and attracts buyers. “While it’s true that you will never be able to get a haircut online, the same cannot be said for buying books or groceries. We cannot assume that because people always shopped at grocery stores that they will not learn and adopt another way.” said Chandan. “The commercial market needs to develop a narrative that evaluates how flexible people are with their shopping habits.”

The National Association of REALTORS®, “The Voice for Real Estate,” is America’s largest trade association, representing 1 million members involved in all aspects of the residential and commercial real estate industries.

1 Comment
Heights Title Services link
6/17/2019 03:28:47 am

Your information is great for us it is very helpful for us thanks for sharing this.

Reply



Leave a Reply.

    Author

    Santa Ynez Valley Association of REALTORS®.

    We are a trade association with 139 REALTORS® members and 30 Affiliate members. Our members service the towns of Santa Ynez, Solvang, Buellton, Ballard, Los Olivos, and Los Alamos in the Santa Ynez Valley of California. 

    Archives

    March 2018
    January 2018
    May 2017
    March 2017
    February 2017
    October 2016
    September 2016
    August 2015
    May 2015
    April 2015
    July 2014
    May 2014

    Categories

    All

    RSS Feed

Picture
Picture
Useful Links
Santa Ynez Valley
Useful Links

Find a REALTOR
Market Trends
SYVAOR Affiliates
SYVAOR Board


Mailing Address
650 Alamo Pintado Road, Suite 201
Solvang, CA  93463

Phone & Email
(805) 688-7744
[email protected] 

Home  | Realtor Resources  |  Privacy Policy  |  Terms of Use  | Contact
© 2024 -- Santa Ynez Valley Association of Realtors, All rights reserved.
The Santa Ynez Valley Association of Realtors®, in one with our organization's mission and vision, is committed to making our website accessible to everyone. At this time, we recognize that not all areas of our website may be sufficiently accessible to some of our visitors. We further recognize that some of our functionality and the associated content is complex, has contractual implications and, even with best efforts and intentions, may not be effective when used with screen readers or other devices. Given that our goal is to provide a website, content and functionality that is broadly accessible, we invite anyone requiring specific accommodations to contact us at (805) 688-7744 and ask to speak with the accessibility coordinator who will work with you to provide an effective accommodation.