Hartford Being Sold to Out of Town Investors?

Big Hartford office buildings are now such a good deal, per square foot, that they are attracting buyers from out of state, many of whom may have been priced out, or have priced themselves out, of the NYC market.  Since most real estate markets are cyclical, and since office space can obviously be leased for less if it is bought for less, it seems reasonable to think that these investors will realize gains in the medium and long run. 

Will other markets in Connecticut follow?  It also seems sensible to think that, the closer to NYC something is, the more it will eventually be worth.  There is a clear correlation with housing prices, based solely on distance from Manhattan, and it likely holds true for commercial buildings as well.  So will New Haven also see a boom in out-of -town buyers?  That seems already to be happening, and will probably continue.

Time to Pull the Trigger

One thing that people have been saying about commercial real estate for ages now is that "buyers and renters are looking, but no one is pulling the trigger".  Some of that is because of real and unfounded fears about the economy, some around here is about Connecticut as a place to do business, and some is just the normal foot dragging, exacerbated by the sense that whatever space they might be considering will still be available when they get around to making a decision.

Because this has persisted, there now is a shortage of certain kinds of space and buildings.  So it actually may not be true that it will still be there when a buyer finally decides.  Also, as we all know, there is quite a lag time between signing the contract and closing, and often as well between closing and occupancy (or optimal efficiency).  Therefore, if you have plans for 2015, and they involve increased production, increased distribution, increased employment, or increased sales, now is the time to be pulling the trigger.  It's closer than you think!

Busy, Busy, Busy

Although we can't yet see it in sales results, many of us are busier than we've been in years.  One agent recently told me that he has more going on than he's had in 20 years!  What does this tell us?  It says that people know that it's a good time to buy (true), that rates are low (very true!), and that the economic climate is improving (true).  Businesses are busy, but they are still not pulling the trigger on space.  Maybe they are too busy to do the work, or they aren't confident that sales will improve and stay better.  Whatever the reason, we are in the part of the cycle that reminds me of my old days of rowing college crew--the stroke has to raise the stroke by putting his/her oar in the water first and doubling down until everyone else catches up.  That's where the market is--we are doing the work, and the results haven't appeared yet.  But it appears that they will, meaning that those who rented or bought sooner will do better than those who waited.  Where will you be?

Getting Ready for Spring

As I sit here listening to March roar like a lion, I'm already anticipating, as are so many others, that spring is just around the corner.  Tuesday gave us a taste of warmer weather, and more can't come fast enough to suit most of us.  With the arrival of spring, buyers get a burst of energy, from lighter evenings and fewer travel headaches, as well as from the necessity for moving forward with yearly plans after a winter of hibernation.  If you are a seller, will you be ready?

It's hard to keep a property looking nice with snow, ice, and sand all over. It's also hard to get repairs and maintenance done, especially on the outside of buildings.  However, once spring pops, and buyers appear, you need to be ready to strike while the iron is hot.  You can't assume that the first warm day will be soon enough to think about repairs and improvements.  The paperwork and the marketing materials take a couple of weeks to prepare and execute.  Flyers and mailings take time to sink into buyers' minds.  Even when people decide upon a property, the financing and inspection processes can seem endless. 

It all begins with the seller, and the sooner, the better.  Get ahead of the curve, and be ready for those buyers when they come, even if it seems like "hurry up and wait".  Call your agent today, and be the lucky seller who meets the market head-on. 

Connecticut's Slow Recovery

Recent press releases by those studying CT economics suggest that our recovery here still has a long way to go.  New Haven is first among 142 metro areas as a buyers' market, meaning that prices are still flat or declining, making it a good place to buy.  This is a little misleading, because the flip side is that prices never went down the way they did in places like Arizona and Florida, which are at the top of the list as far as sellers' markets go.  The reason is that they have little inventory now, and low prices.

We are also near the bottom on a national basis for recovery statistics.  Our unemployment is at 8.8%, vs. 7.7% nationwide.  Our state has only recovered 25% of the jobs lost, as opposed to 52% nationally.  A list of states by recovery amount puts us 46th.

The most interesting thing about these facts to me is that we are busy in commercial at Pearce!  I have been meeting this week with agents, and they are mostly very optimistic and have a lot going on.  We will finish the year at least double last year's totals, and have some fairly big transactions left to close in early 2013.  I am also getting inquiries about commercial real estate as a career, and have hired two agents in the past month.  That hasn't happened in a long time!

What this suggests is that the Pearce results may reflect market share increases, as opposed to market increases, but that the sector is primed to take off, and that 2013 will be an even better year.  So it won't be a buyers' market for long--act now!

It's Getting Better!

We've all been looking at each other in the commercial group lately, and remarking on how busy we are.  What a change!  It certainly means that people are out looking for space, particularly in sectors that are seeing more current activity, like restaurants and luxury goods. 

What does that mean for sellers and buyers?  If you are a seller, you are probably wondering whether you should hang on and wait for prices to rise.  If you do, you will be competing with a lot of other people who've been waiting for the same thing, so you had better compare favorably.  That means, if your property wouldn't sell if a better one like it were on the market, it would make more sense to list now, when there is less competition. 

If you are a buyer, you are still in a buyer's market, so this is a great time.  Don't wait too long, or prices will start to go up, and you will end up paying more. 

Bottom line:  I think we've passed the bottom.