Monday, July 30, 2012

Heading into the Election

Some things change from election to election, but some things don't seem to vary.  One constant is that the sitting President, and his party, try to make the economy look as good as possible, for obvious reasons.  My friend Ray Fair, in his economic research, has a regression model showing that the incumbent is heavily favored, and statistically almost certain to win, if the economy is good or improving.  By those odds, Obama would seem to have the advantage, at least if you are talking to real estate professionals (although they are much more likely to be Republicans in general!).

And how does a President, or the legislative branch, go about making the economy look better?  One way is to make sure that interest rates don't go up.  As we have seen, they have just gone down again, and are now at their lowest rate in 60 years.

For commercial real estate, that means that both investors and users should be looking for product now.  They cannot count on getting the kind of financial help that low interest rates provide for much beyond the election.  Given the length of time that it's been taking to close a commercial transaction, time is of the essence.  Act now!

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