Slow and Steady Wins the Race?

We've now written quite a bit about the lagging state of Connecticut's economy, including its current status as dead last among the fifty states in economic growth in 2012.  However, it is important to point out that we're having a good year at Pearce Commercial, following a very good year last year.  By not being in a major metropolitan market, we may have escaped the worst of the price reductions; on the other hand, since we didn't fall as fast or as far, we are not experiencing the same rapid upturn. Those stories about the hot NYC market don't extend to greater New Haven and Hartford.  Office space is still moving slowly.  Could that be a good thing?

Everyone knows that real estate is cyclical.  Everyone knows that what goes up must come down.  By flattening that line, we may be protecting ourselves.  Meteoric rises are what produces bubbles.  That's what we don't want to see.  If our real estate market can grow slowly and steadily, so much the better.

It's not all rosy. Commercial real estate financing isn't easy.  Companies that downsized aren't rushing to lease more space; in fact, it's the reduction in overhead that is most likely producing a good deal of the increased profits in corporate America these days.  Perhaps most annoyingly, people still seem reluctant to pull the trigger.  They look and look, but stall for long periods of time, sometimes not ever making the offer.

  But there are investors out there, as well as some users, and most of them seem to realize that mortgage rates have nowhere to go but up, and that values are headed that way as well.  We don't have big backlogs of empty buildings and overbuilt space.  In short, we seem to have most of the attributes of a balanced market.  And that's a good thing.

Timing a Sale or Purchase

As I think we all know, it almost never pays to try to time some financial event exactly, be it a stock sale or a real estate transaction.  The most we can hope for is to get close enough to either the top or the bottom of the market, depending upon whether you are buying or selling, to feel good about your decision. 

Well, when it comes to the real estate market, people have been trying to pinpoint the bottom of this  particular cycle for years now.  We may not be at the absolute bottom for demand and prices--in fact, I think that we are slightly past that point--but we are close.  So is it time to sell?