Although the economy has been showing signs of improvement over the past few months, there are negative signs out there which might make us think otherwise. One of the biggest reasons for the poor economic situation that the country is facing was the housing market crash. That slump in the housing market has inevitably extended itself into the commercial property market as well, as pointed out by a well known investor, Wilbur Ross. Wilbur Ross said that the US. is in the beginning of a huge crash in commercial real estate.
Wilbur Ross is one of the nine money managers participating in a government program to remove toxic or dangerous assets from bank balance sheets. So a statement coming from a man like this seems to be giving all the wrong directions for the US economy which was expected to come back to life soon enough. However, property prices and commercial rent continues to rise putting further pressure on the economy as a whole.
Another well renowned investor, George Soros believes that gone are the days when the US consumer would drive the world economy. Although Ross does believe in self-correcting markets, he is of the opinion that it will take some time for the economy and the commercial estate market to correct itself. Although right now things just seem to be going the wrong way. Just to elaborate my point, I am attaching a little excerpt from the article:
"U.S. office vacancies hit a five-year high of almost 17 percent in the third quarter, while shopping center vacancies climbed to their highest since 1992, according to the property research firm Reis Inc."
No comments:
Post a Comment