Jeff Ostrowski
Alexandra Clough
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UF: Slowdown infecting apartment, commercial markets
So much for commercial real estate defying the housing slowdown and buoying the Florida economy. The state’s apartment, retail, office and industrial markets are falling victim to a slowing economy, says Wayne Archer, director of the University of Florida’s Bergstrom Center for Real Estate Studies.
“The decline in consumer spending is finally beginning to show up in rental markets,” Archer said. “Either people are becoming increasingly cautious or they have already been impacted by declining real estate sales or the state budget cuts.”
UF surveyed 275 appraisers, brokers and consultants in May and released the results of its survey today.
“The biggest surprise is how notable the downturn in the state of the apartment market appears to be,” Archer says. “It could be that people are trying to save money by doubling up and sharing accommodations with roommates, reducing the demand for apartments.”
The retail and industrial markets also are suffering, but Archer says the gloomiest forecast is for residential sales.
“I don’t see any signs to suggest a quick bounce back for the housing market in 2008,” Archer says. “It looks like we’re going to have to endure some more months of quiet suffering at least into the spring of 2009, which would be a more logical time for market cycles to change.”
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By Get in the Game
July 7, 2008 12:23 PM | Link to this
Any surprise? To anyone?
Blackstone was flipping buildings to other toolsheds.
Again, is there any surprise here?
Commercial is non insulated! Yep! Just like…
The ‘luxury’ market, wealthy individuals, …
Servicers (US banks) are requiring 35% down for an acquisition of a commercial building (unless you are a bona fide institutional investor (Calpers, Harvard Endowment Fund,…)).
Again, this sector just like residential RE shall force humans to save money.
Consumption is the reward for savings.
Irrational on the way up = irrational on the way down.
By ChicagoAntagonist
July 7, 2008 1:02 PM | Link to this
What else could you expect when virtually 100% of recently build housing was/is priced at levels attainable by only 10% of the population.
Despite the wishes and dreams of some local cheerleaders, Florida remains primarily a low-wage service and tourist industry, right-to-work state. COnsequently, the majority of working class adults down there work jobs that pay from $8 to $10 an hour.
Thus, the prospect of a $2000/mo mortgage, or even $1000 rent becomes insurmountable for the person who’s gross monthly income is only $1600!
This is Florida, not New York, Not Chicago, Not Boston. When prices become more realistic and in line with true local average wages, THEN there will be some action.
You all seem to forget that for every Palm Beach millionaire, there are literally thousands of support workers that perform all of the everyday mundane job duties that are necessary to keep our comfortable American society operating. And those thousands of support workers that deliver, drive, service, support, clean, maintain, paint, stock, load, and cashier are all working hard 40 hours and more per week for mostly low wages, $7 to $12-an hour. These multitudes of people need places to live within range of their incomes.
Thus, the only way to fill in some of the thousands of empty homes, condos, and apartments, is to drastically slash the prices from ‘up north’ levels, down to real Florida levels.
By Boca Condo King
July 7, 2008 3:41 PM | Link to this
Perhaps Jeff can provide some numbers on Commercial RE.
IE, Residential RE is down 27% from its’ highs. Where is Commercial? 1% 25% has not started to go down? How much did commercial RE go up in the bubble years? What was the PSF cost of commercial in 2001 vs 2008?
Just asking….
By Low Wages
July 7, 2008 4:59 PM | Link to this
Now we’re getting somewhere. Mr. Chicago left because he can’t find a job in Florida or atleast he can’t find anyone to pay him what he thinks he’s worth. That’s the bitterness. That’s the core of the whole service provider crap he spews every other post. Grow up and get over yourself. There are plenty of decent paying jobs in Florida.
By ChicagoRefute
July 7, 2008 6:13 PM | Link to this
Mr. Low Wages has it quite the opposite. The best jobs I ever had have been in Florida. FEMA pays well, and the work was quite rewarding. Especially when I was able to parlay my music into my job! Leading student tours to St Augustine, Tallahassee, and Tampa was also enjoyable work, and pay. Also, being a musician for Disney, and the Palm Beach Princess were fun jobs, that paid well, especially when one considers those full time music gigs required only about 18-20 hours of actual work per week, but offered full time pay.
No, I left FLorida because I had no desire to remain there beyond my school obligations. I didnt even stay around for the graduation ceremony. I split the day after my final class.
You see, Im too young to retire, but too old to just party and live the Jimmy Buffet lifestyle. Also, I find golf boring, and have no desire to learn Creole, or Spanish. Thus, no reason to waste the prime years of my life in a vacation/retirement state.
Moreover, I returned to the midwest for the warmth. Family oriented, roots oriented folks live up here. Unlike FLorida, where the entire state is transient.
I find that the warmth of the real people up here more than makes up for the cold winters. Plus, its kinda nice to have my windows open most of the summer, and no mold anywhere!
By Cap'n Condo King Pizow
July 8, 2008 8:37 AM | Link to this
This is the Cap’n signing in! I’ve been getting alot of fan mail recently wondering where I have been…. So to dispel those rumors, no, I am not yauchting in the Mediterranean like I was this time last year, I’ve just been so busy cramming these Guats into commrecial properties! It’s unfathomable how many Guat families we can stuff in an abandoned warehouse. And they say the commercial market is gone bad. It’s back like cooked smack! You need to get like me and flip those condos people!