Despite a boom in residential construction activity, construction employment growth has remained lackluster and is up just 100,000 from the trough in early 2011. This is because residential building declined by more than residential employment resulting in value added/worker falling from about $80,000/year to about $60,000/year as employers kept their best workers. But with total construction hours now above previous highs, expect 20,000 new hires/month for the next few years.
Elliot F. Eisenberg, Ph.D.
GraphsandLaughs, LLC
www.econ70.com
February 2013 Market Trends
REALTORS® Markets Gain Steam in 2012
by George Ratiu
Commercial REALTOR® markets posted accelerating growth in sales and leasing activity during the fourth quarter of 2012. Based on the results of the January Commercial Real Estate Market Survey, commercial practitioners closed the year on a more upbeat note. Commercial REALTORS® rated business opportunities in the fourth quarter 6% higher than the previous quarter.
On the leasing side, activity rose 3% over the previous quarter, indicating rising demand. On the supply side, new construction was down only 1% from the third quarter.
Vacancies declined for all property types, except hotels, which rose to 20.8%. Industrial rates declined 240 basis points, to 15.7% while retail rates decreased 130 basis points, to 16%. Availability for multifamily properties continued on a downward path, with vacancies at 7.3% in the fourth quarter. After a midyear bump, office availability rates slid from 19.3% in the third quarter to 18.2% in the fourth quarter.
With declining availability, landlords were in a position to offer fewer rent concessions. However, rental rates have yet to recover in most REALTOR® markets. In terms of space size, tenant demand was strongest in the 5,000 square feet and below properties. The fourth quarter witnessed growth in demand for spaces in the 7,500-9,999 square foot range. Lease terms remained steady, with 36-month and 60-month leases capturing the bulk of the market.
Investors have actively turned their attention towards secondary and tertiary markets, seeking higher yields in growing markets. Investment sales rose 11% from the third quarter, and a noticeable 18% year-over-year. Nationally, 68% of REALTORS® reported completing a sales transaction during the quarter. Prices decreased 4% compared with a year ago. Cap rates rose for all office properties, except hotels.
(NAR)
Register for Yes, Your Honor, I Did Disclose
February 28, 2013
8:30 a.m. – 12:30 p.m.
4 CE Credits
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The term “common law’ is used so often, but what does it mean and how is it created?
In this course six appellate court opinions will be reviewed and examined to learn what the courts have said about how we as brokers must act in the field.
Class Instructor is Bill Hallett, the founder of Mandatory and More. Bill has been a REALTOR instructor since 1995.
