Here’s three articles that I found interesting this month.
Residential Real Estate
Is the housing market unusual?
The residential market seems a bit off to me. I think we won’t really see a drop in the market until this summer with laid off workers running out of severance benefits. The indicators for trouble would be increased interest rates and days on market (DOM) for properties. As the time line stretches out, prices often get lowered and negotiations get more intense.
https://www.sfgate.com/realestate/article/bay-area-housing-market-slumps-in-january-17788878.phphttps://www.sfgate.com/realestate/article/bay-area-housing-market-slumps-in-january-17788878.php
Commercial Real Estate
Return to work?
I was talking with a friend about this, that cities want the return to work as much as employers do. This would help with local business recovery. As it stands now the return to work situation may be hindering some markets recovery.
Commercial properties defaulting?
In commercial real estate, loan defaults for properties such as office and retail should come as no surprise. So far it looks like this is just the beginning but I would caution about anticipating a large default with loans. Unlike residential investors, most commercial investors are other organizations or high net worth individuals with greater resources and professional advising. In addition to that, most properties are secured by leases that the tenants are responsible for. The real tipping point to indicate how bad property defaults will get depends on tenants paying lease cancellation fees or defaulting on their own leases.
https://www.linkedin.com/pulse/cre-distress-droves-real-estate-rundown-therealdeal/
Adam Moura 