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Commercial Real Estate

Mar 3

White House Sale

by Mary Teresa Fowler
Government Real Estate Surplus Sale

The White House is not for sale but the Obama administration is planning a sale. Actually, the government is organizing a huge clear-out - thousands of vacant or underused federal buildings. The transactions will occur gradually over the coming years.

Huge Sale

Obviously, arranging such a substantial deal requires plenty of professional help. The administration must determine which office towers and courthouses should be put on the market. If the government does not see a need for a specific property, it could make the real estate listings.

Review Panel

At least 1.2 million federal buildings will have to endure the review process. The reviewers will be an independent commission of public and private sector real estate experts. Although the announcement was not made until March 2, the panel was referred to in President Obama's 2012 fiscal budget request. The panel is modeled on the military's Base Realignment and Closure Commission.

Groups have raised concerns, however, about the review process and availability of information to interested buyers. People note prior cited federal properties in California and Missouri that were declared surplus in 2002 but not sold by 2009. Sen. Thomas R. Carper (D-Del.) who is writing a bill to trim the federal real estate portfolio is in favor of the sale.

"Clearly this is an area where the federal government gets better results for less money by reducing the amount of property we own and by better managing the property we keep," said Sen. Thomas R. Carper (D-Del.).

Common Sense

According to Jeffrey Zients, deputy director of the Office of Management and Budget, the decision to sell is a common sense approach.

"The government doesn't need all of these properties," explained Jeffrey Zients, deputy director of the Office of Management and Budget.

It could make sense for government to sell off a few buildings. The federal government's annual building operation and maintenance budget is more than $20 billion. A 2009 government audit showed that 14,000 of these properties are vacant and another 55,000 are not used to their potential.

Planned Savings

The Obama administration hopes to save $3 billion with the sale. Commercial real estate experts, however, do not expect the government to meet that goal. Industry sources expect several properties will not be in prime locations. Even well-located sites might not sell for top price. Last summer, a federal building in Bethesda, Maryland, sold for $1.5 million less than the asking price and the opening bid was only $100.

Maintaining Value

Real estate veterans suggest that maybe the government should be looking in another direction. Probably the administration could take a long term approach. Industry sources say that the government must focus on maintaining the value of their assets.

It can prove challenging to sell federal buildings. Part of the challenge is the diverse real estate needs of federal agencies. For example, military branches might need only part-time access (for months at a time) to buildings.

White House has plan to increase sales of vacant, underused federal buildings

Do You Agree With The Proposed Sale Of Federal Buildings?

Image courtesy of laist.com

Mar 1

Most Stable Form of Commercial Real Estate

by Mary Teresa Fowler
Commercial Real Estate - Most Stable Industries

Commercial real estate covers varied sectors such as apartment buildings, offices, industrial spaces, and retail outlets. Certain areas perform better than others in an economic downturn. Which commercial sector will be the most stable during a recession?


Health-care real estate will do better than other commercial sectors because the field involves a necessity. Health-care will attract consumers - regardless of the economy. An individual might wait to make a large purchase or take a trip until the economy improves but people will not put off health care until after a  recession.

Unfortunately though, the sad reality is that people have delayed a trip to the doctor because they do not have the proper insurance. The Obama overhaul of health care, however, is expanding the availability of health insurance. As a general rule though, consumers have (and will continue to) seek immediate help for serious health issues.


A similar necessity drives office real estate more than the hospitality industry in economic turmoil. Business owners might cut back on corporate trips during a recession but, most likely, entrepreneurs will hold on to their offices. Hotel REITs might not perform as well as other categories. Yet health-care REITs can move upward during poor economic times. Jeff Theiler, an analyst at Green Street Advisors, a REIT research firm based in Newport Beach, California, said that health-care REITs made the most acquisitions in the industry last year.

Health-Care Acquisitions

Ventas Inc., the largest U.S. owner of senior housing and assisted-living facilities, has agreed to acquire its rival, Nationwide Health Properties Inc., for $5.8 billion – the latest and largest biggest deal in a string of acquisitions by publicly traded health-care, real-estate companies in recent times. After this acquisition closes in the third period, Ventas Inc. will own 1,311 properties in 47 states, the District of Columbia, and two Canadian provinces. Their property breaks down into the following categories – senior housing (643), skilled nursing (379), medical facilities (234), hospitals (47), and other (8).


Consumers might wonder where Nationwide Health Properties Inc. made its mistake. After all, if health-care real estate is viable, why didn't this company survive the commercial crisis? Theiler believes that Nationwide did mot market as aggressively as other health-care companies. For example, Ventas has been active in the market. In October, 2010, Ventas acquired the assets of Atria Senior Living. In December, the company made a $6 billion HCP purchase.

Rising Demand

With more people accessing health insurance, the evolving trend towards outpatient facilities, and an aging population, there will be a growing demand for medical-office space.

Other Players

Of course, Ventas Inc. is not the only entity interested in health-care acquisitions. During 2010, health-care companies acquired $11.7 billion in medical-office and senior-living facilities. Following the February 28 announcement by Ventas, Health Care REIT Inc. agreed to acquire almost all of the real-estate assets of Genesis HealthCare, a privately held company based in Kennett Square, Pa., for $2.4 billion. Health-care REITs are not standing on the sidelines because they recognize the market potential of health-care real estate.

Demand for Senior Care Spurs Deals

Do You Expect A Continued High Demand For Health-Care Real Estate?

Image courtesy of hamiltonhospital.org

Feb 17

Hot U.S. Real Estate Markets

by Mary Teresa Fowler
Hot Real Estate Markets

Looking for a hot U.S. real estate market? Everyone is – especially those living through a cold and stormy winter. Buyers in a wintry climate might be looking literally for 'hot' U.S. real estate.

Hot Market

Of course, realtors in sunny climates recognize the plight of winter-weary potential buyers. Savvy real estate agents rev up their advertising campaigns to attract homeowners tired of shovelling snow. So, the 'hot' markets like Florida are popular with U.S. home buyers.

Manhattan Market

Manhattan is a historically-sound and hot real estate market. Even hotel properties are flying off the shelves in New York City. According to a February 16 report by Jones Lang LaSalle Hotels, the Big Apple will see double the volume of hotel deals in 2011. This report does not include the expected volume of residential transactions.

Probably, most people are not surprised about tropical climates and dynamic centers like New York City rating as hot real estate. Yet more than a few buyers are surprised by the Bloomberg News announcement about a very hot U.S. real estate market. After all, not all U.S. regions are in their peak period. One specific sector, however, is doing better than expected as the country comes out of a recession.

Growing Market

According to Bloomberg News, farmland in the middle of the country's agricultural belt is a hot real estate market. On February 15, the Federal Bank Reserve of Kansas City said that fourth quarter farmland prices in the US are up the most in two years. Keep in mind that potential buyers must be interested in these properties considering the effort they make to arrive at auctions.

Bidders will not be flying first-class to a tropical paradise to view this type of real estate. Interested parties will be travelling over snowy and icy roads to look at the properties. Recently, bidders took that trip to bid on one of the most coveted properties in the U.S. Midwest - 120 acres of farmland in Greene County, Iowa.

Winning Bid

The winner of a January auction in Jefferson offered $8,200 an acre (about $1 million) for land in Scranton Township. According to Iowa State University data, that price is 44% higher than the $5,701 per acre estimate for average values in the county. Residential and commercial properties in these areas sell for low prices.

Reason to Bid

Losses of manufacturing jobs have caused economic stress in this region and resulted in a drop in housing prices. Yet farmland is a different story. As commodity prices increase, farmers and investors are bidding at farmland auctions. Farmers are buying for the long term and investors recognize a potential profit.

Rising Values

During 2010, values in Iowa rose 16 per cent. Iowa is the largest corn-and-soybean-growing U.S. state. If commodities stay at current levels, values in Iowa might increase an additional 10 per cent. It looks like more investors might be travelling over icy roads to farmland auctions.

Farmland Boom Provides Boost to Slumping U.S. Midwest Real Estate Market

Would You Be Interested In Buying Farmland In Central USA?

Image couretsy of bloomberg.com

Feb 3

Super Bowl Scores – Real Estate Woes

by Mary Teresa Fowler
Commercial Real Estate and Super Bowl Predictions

The football team whose city has the most commercial real estate vacancies will win the Super Bowl. That is the prediction of Roger Staubach who led the Dallas Cowboys to two Super Bowl victories in 1972 and 1978. At present, Staubach is the Americas executive chairman for Jones Lang LaSalle - a global financial and professional services company specializing in real estate. Based on his expertise and experience in sports and property, the former-football-player-turned real-estate-executive stands by his belief.

“As a student of both football and commercial real estate, I can tell you that this vacancy rate hypothesis is absolutely the real deal. When it comes to picking a winner, you can throw everything else out the window,” says Roger Staubach, the Americas executive chairman for Jones Lang LaSalle.

Social and Economic Impact

Staubach and his son Jeff (a senior vice president at Jones Lang LaSalle) have been blogging about Super Bowl XLV and throwing a bit of real estate into the mix. Whether or not you give credence to the prediction, the Super Bowl does have a social and economic impact on the city that holds the event. Actually in 2010, the Staubach team launched "Countdown to the Super Bowl: The Economic and Social Impacts for North Texas." Staubach chaired the bid to hold the event in North Texas.

Financial Giant

Jones Lang LaSalle has stayed in the background as Staubach shares his predictions. The global financial firm has not offered any explanation about the connection between commercial real estate and Super Bowl wins. Of course, real estate predictions can be based on anything from a crystal ball to empirical research. Yet it is doubtful that Jones Lang LaSalle favors the crystal ball method. The professional services company is more the 'trends and statistics' type who would favor scientific methods.

Jones Lang LaSalle Hotels handles major financial announcements. The group forecast the 2011 deal volume (US $13 billion) in the Americas. The team figured out that REITs would be among the most active buyers with total volume for 2010 expected to be US $10.5 billion.

Winning Prediction

Not surprisingly, Jones Lang LaSalle has not weighed in to any great extent on the 'winning' prediction. Apparently though, the company has no objection to their executive chairman for the Americas claiming that his prediction is the "real deal." Maybe Jones Lang La Salle and Roger Staubach are smart enough to know that they are the winners getting the real deal.

We can predict that the 'prediction' is great publicity. According to the NFL, 65% of Super Bowl attendees are corporate executives. The group could include executives who might buy office space in the city or even relocate their headquarters. After these predictions, they will remember the names of Roger Staubach and Jones Lang LaSalle.

Who Will Win The Super Bowl?

Pittsburgh Steelers vs. Green Bay Packers Sunday - February 6, 2011

According to Staubach's theory, the Green Bay Packers will win over the Pittsburgh Steelers. Green Bay's commercial vacancy rate is 18.9% but Pittsburgh has one of the lowest office vacancy rates in the US – just 12.1%.

And Yet Another Interesting Fact…

Since 2002, almost two thirds of Super Bowl wins have gone to the city with the most office space vacancies.

Super Bowl winner predicted by analyzing commercial real estate vacancy rates

Who Do You Think Will Win Super Bowl XLV?

Image courtesy of alahlymobasher.com

Feb 1

2011 – Year of the Landlord

by Mary Teresa Fowler
Year of the Landlord

2011 is shaping up to be the "Year of The Landlord." As many people face the winter winds, we are reminded of a wise old saying.

"It's an ill wind that blows no good." ~ John Heywood (1497-1580)

In the case of the winds of change in real estate, falling house prices and slow sales have challenged many sellers but benefited more than a few apartment building landlords. More people are choosing to rent but others can find no suitable alternative to apartment living. Everyone has their own reason for deciding to rent property rather than buy a home.

Rent or Own

Sometimes renting is the best choice for an individual. Indeed, many renters prefer the apartment lifestyle. After all, renting a luxurious NYC condo does not seem like such a bad deal. Even renting any apartment has its perks such as more flexibility in relocation and less maintenance responsibilities.

Of course, other renters would sooner own a home. Often foreclosure forces homeowners to become renters. Sometimes potential first-time buyers discover that they cannot afford the financial commitment of a home. The Federal First-Time Homebuyers' Tax Credit is no more and not everyone has an "angel investor."

Whether people choose to rent or have no other choice, landlords are gaining tenants. Banks and lenders are also smiling – especially if the apartment building owner had been previously under financial duress. Borrowing has become less expensive with low interest rates.

This effect is noticed with commercial real estate of all types. The low rates have a positive effect on borrowing for office buildings, retail outlets, and company warehouses. The apartment market, however, is the healthiest of the commercial categories – mainly because of cheap financing.

Investing in Apartments

Obviously, investors are interested in apartment buildings. Actually, 'flipping' properties is coming into vogue again. The practice of reselling quickly for profit is somewhat prevalent at all times.

Yet 'flipping' is as popular now as in earlier thriving economic periods. This practice can have its place - if done responsibly for the right reasons. Illegal flipping, however, is a different matter. It involves scams, disregard for others, and a goal of profit at any cost.

Higher Values

Apartment building values have risen to levels not seen since the middle of 2007. According to the brokerage firm Marcus & Millichap, values of apartment buildings rose 16% in 2010. Green Street Advisors, a research company tracking REITs, say that present values are now within 10% of their 2007 peak value.

Of course, apartment values in major centers such as New York and Washington, D.C., have shown signs of recovery since 2009. Currently, increasing apartment values can be seen in additional markets including Los Angeles and Seattle as well as other U.S. cities. At the end of 2010, TIAA-CREF paid $62 million for the 261-unit Newbury Commons in Stamford, Connecticut. According to Real Capital Analytics, this sale price was 65% more than the amount paid by Seaboard Properties in February 2009.

Apparently, even Las Vegas is seeing the high values. Keep in mind that Las Vegas was affected greatly by the economic downturn. Yet in December 2010, the Croix Townhomes complex in the Las Vegas Henderson suburb sold for nearly $20 million - $143,000 for each unit – a price even far above the national average. The 'apartment advantage' might be the start of the next big trend in investment property.

Housing Woes Fuel Apartment Surge

Will 2011 Continue To Be The "Year Of The Landlord?"

Image courtesy of architecturelist.com

Real Estate Predictions

Most likely, the majority of real estate predictions fall somewhere in the middle - based on more than a crystal ball and less than empirical research. Maybe there might be one or two people who put predictions out there without any thought. Yet most real estate predictions are the result of studying trends and statistics.

Accurate Predictions

Apparently, a few of these predictions can have a high accuracy rate. For example, the Globe and Mail has tallied the score for predictions made by Neil Downey, RBC Dominion Securities analyst. Downey offered five predictions for 2011. Before the end of January, three predictions have become reality.

The Globe and Mail's story is titled – "The real-estate crystal ball." Probably, careful observations are responsible for these impressive results. No crystal ball here; maybe though a little luck, too!

Which Correct Predictions Did The Analyst Make About Canadian Real Estate?

  • Richard Baker, the New York investor who bought Hudson's Bay Company, is ready to close a $2-billion deal bringing Target Corp. into Canada.
  • RioCan Real Estate Investment Trust is looking for funding of its acquisition plan as well as refinancing for outstanding debt. Recently, REIT hit the market with rate reset preferred shares and senior unsecured debt.
  • Canada's commercial mortgage-backed securities market is making a rebound. Two major real estate companies are tapping the market for $206 million – the first deal of this type since 2007. 

As well, Downey predicted more TSX-listed REITs at the end of 2011 than the beginning and less equity raising activity. The Globe and Mail is waiting to see if these two predictions will come to light.

Core Predictions

Real estate predictions are a serious business. The real estate industry is at the core of an economy. Home buyers account for a huge percentage of economic activity. Commercial real estate involves three main categories - retail (stores, malls), industrial (factories, warehouses), and commercial (offices, multi-dwelling buildings).

Real estate transactions are handled by brokers and agents. Certain agents offer property management services to businesses. When entrepreneurs are doing well, real estate transactions experience an increase. In a poor economy, realtors help businesses to find the best location and affordable facilities.

Empirical Research

Empirical research (such as Plotkin 2002) has been conducted about the role of real estate in an economy. The "first major empirical nonfinancial ratio business success versus failure prediction model" was applied to the real estate industry in New England. The purpose of this study was to develop and test a nonfinancial model that would predict real estate business success or failure using the Lussier (1995) prediction model.

'Lussier' was selected for the study because it had been published in more journals than any other model. The study suggested that similar methodology be used to conduct studies in other parts of the US as well as in other countries. Real science here – far more than a crystal ball!

A Success Versus Failure Prediction Model for the Real Estate Industry

How Have You Arrived At Your Real Estate Predictions?

Image courtesy of adrworks.com



Jan 12

New York City Penthouses – Life at the Top

by Mary Teresa Fowler
New York City Penthouses

When developer Ian Schrager, co-creator of boutique hotels, and his partners asked the renowned architectural firm, Herzog & de Meuron, to design 40 Bond Street in New York City, they were choosing a top team. This prestigious firm had designed the Tate Modern Museum in London, the main stadium for the Olympic Games in Beijing, as well as other world-class projects. Schrager made one more top decision.

"I'm taking the penthouse," says Schrager.

Luxury Penthouses

No doubt, building owners and co-owners can have the first chance to live in the luxurious penthouses. Most owners of luxury real estate position themselves at the top. Take Donald Trump and Trump Tower – another co-developer who took the opportunity to occupy an opulent penthouse. Do you ever wonder what life is like at the top?

40 Bond Street

The penthouse at 40 Bond Street makes a sizable impression and comes with a big price tag – a reported $18.5 million. That chunk of cash will get you 6,626 square feet of interior space and 3,529 square feet of exterior space. Of course, you could choose a smaller 3-bedroom apartment for $9,950,000. You could even choose a 2-bedroom unit for the more affordable price of $4,850,000.


The apartments at 40 Bond Street have all kinds of luxurious features - Austrian smoked oak floors, Italian cabinets with smoked oak and high gloss lacquer, as well as Glacier White Corian walls, and shower floor with embossed graffiti pattern. 40 Bond Street was designed to reflect a version of SoHo commercial loft buildings. The building uses a green glass grid instead of cast iron.

Boomer hotel icon Ian Schrager is far from done

Trump Tower

Donald Trump chose an office and a penthouse in Trump Tower at 721 Fifth Avenue. Angelo Donghia designed this elegant penthouse. Even from the outside, Trump Tower is no ordinary building. Its unique look and unusual layout make an innovative statement.


Donald Trump continues to express his individuality with his choice of detailing. From the inlaid Trump Tower seal on the ramp of the entrance to 'T' stanchions and vitrines, it is hard to miss the 'Trump' connection. Developers of luxury properties tend to make their mark with extravagant buildings.

Trump Tower is full of elaborate details. Its 100-foot high atrium features a seven-storey waterfall in front of Breccia Perniche marble in gorgeous colors – peach and orange - pink and rose. Polished granite walls and brass vitrines add an extra glow.

Trump Burns Mortgage At Trump Tower

NYC Penthouses

Life at the top might cost a fair penny but many buyers are willing to pay the price for a luxurious lifestyle. Of course, if you own (or co-own) the building, occupying the penthouse makes it a more probable and personal choice. Yet developers are not the only buyers wanting to move into penthouse apartments.

Despite the recent downturn in the economy, the U.S. luxury real estate market is rebounding in fast order. Upscale markets tend to make a fast recovery from economic woes. Luxury property is seen as a smart investment in the long term.

Luxurious residences and hotels do well in major centers like New York City. Ask Ian Schrager. He just started Schrager Hotels and created two new hotel brands – one luxury model - and one less expensive brand - for those of us who can't afford the penthouse suite.

What Would Be The Best Thing About Living In A Luxury Penthouse?

Image courtesy of bilgenozturk.blogspot.com



Jan 3

Foreign Investors Favor US

by Mary Teresa Fowler

Foreign real estate investment

According to the results of the 19th Annual Survey released by the Association of Foreign Investment in Real Estate (AFIRE), international buyers favor US property. As foreign investors notice a recovering economy, they are expressing a renewed interest in U.S. real estate. In the latter part of 2010, this real estate survey was conducted among association members. The James A. Graaskamp Center for Real Estate at the Wisconsin School of Business handled the project.

19th AFIRE Survey

Industry leaders are bound to pay close attention to this latest survey by AFIRE with its 180 members representing 21 countries. The survey received responses from members holding more than $627 billion in global real estate and $265 billion in U.S. property. More than 60% of responses named the US as the best potential for capital appreciation. At least 72% of foreign buyers revealed that they plan to increase their US investments in 2011 compared to 2010 transactions.

AFIRE's 19th Annual Survey holds significant weight. The numbers reflect the opinions and plans of an influential group holding a considerable stake in global and regional assets. The 2010 results are far more encouraging than previous dismal numbers.

In 2006, only 26% of international investors saw potential in US property. Now more foreign buyers recognize the chance for capital appreciation in this country. Actually, the 2010 survey showed the strongest faith in this nation's real estate in the past decade.

Leading U.S. Cities

Two US cities – New York City and Washington – outshone other global cities in this recent AFIRE survey. In fact, New York City replaced London as the number one choice for foreign investors in real estate during 2011. Since 2001, London has held either first or second place. With the latest AFIRE results, London dropped to third place – behind the Big Apple and Washington – just before Paris in fourth position. Ian Hawksworth, AFIRE chairman, is not surprised by London's drop in rank.

"...In the last downturn, London was the first market to recover, and whilst investment in the UK Capital is still very active, it is not surprising that London has dropped to third place as investors expand their search to higher yielding markets such as U.S. gateway cities that offer attractive risk adjusted returns," says Ian Hawksworth, chairman of Foreign Investment in Real Estate.

NYC tops London for real estate investors

The popularity of NYC and Washington real estate is not a big surprise. Check out our 2010 articles – Inside New York Hotels – and - Moving To Washington. NYC, Washington, and Boston came in as the top three U.S. cities for foreign investment. New York City and Washington received four times more votes than third-place Boston. Yet in 2010, Boston has moved up from its fourth place position in the previous year. Take a look back at our 2010 analysis of Boston Real Estate – Better & Brighter Market.

U.S. Cities Lead Way for Global Foreign Real Estate Investment

Surprising statistics came to light about preferred U.S. property types for investment in 2011. Multi-family homes, apartments, retail, and hotels are the top four favorites among foreign investors. Offices ranked lower and industrial spaces showed up as the least favorite. Usually, offices are the top pick of institutional investors.

The drop in popularity of office space might be tied to high unemployment rates. Although there is growth in employment numbers, buyers could be feeling somewhat uncertain about investing in offices and industrial property. Yet foreign investors have overall confidence in the U.S. real estate market. Investors interested in U.S. cities quadruple the number of foreign buyers wanting to invest in the UK.

Are You Feeling Confident About The U.S. Real Estate Market?

Image courtesy of usbalkanssummit.com

Jan 1

Real Estate Levels 2011

by Mary Teresa Fowler
Real estate value predictions for 2011

Home buyers and sellers, as well as investors, are trying to figure out the future of real estate in the coming year. Depending on their position, interested parties are exploring different areas of real estate. Individuals and organizations focus on everything from property value levels to interest rates to REIT (Real Estate Investment Trust) debt levels.

Commercial Real Estate

Real-estate fund managers have expressed confidence in the future of commercial real estate. According to portfolio managers, recovery is underway in the current market. The improvement is spurred on by low interest rates, favorable cash flows, and increased demand.

This group analyzes national and regional trends. Using this data, they decide on the most promising property sections and regions. Sectors such as apartments with short leases suffered in the economic downturn but they are expected to rebound in this recovery stage. As corporate travelers return to the road, hotels are attracting the attention of investors.

REIT Debt Level

With regards to REITs, industry experts pay attention to debt level compared to their earnings before taxes, interest, depreciation, and amortization.

Up, Up And Away

UK Business Property

In 2011, UK business property is also expected to be supported by low interest rates. Industry leaders believe that the Bank of England will not change the base rate until later in the year. On December 9th, the Monetary Policy Committee voted to maintain current levels.

Business property boosted by low interest rates in 2011?

Residential Property Value Levels

During 2011, home owners (and potential buyers) will be keeping an eye to property value levels. Within the past week, home owners in Victoria, British Columbia, Canada, were told about a slight increase in their property value assessments. During 2010, B.C. Assessment had frozen property values at 2007/2008 levels.

Of course, home owners are concerned about higher taxes associated with increased assessments. According to Cameron Muir, chief economist for the B.C. Real Estate Board, the increase in property values, however, may not result in a significant tax increase. Muir points out the positive aspect of higher property value assessments in a region.

"The increase would reflect stronger economic conditions and a healthier real estate market," said Cameron Muir, chief economist for the B.C. Real Estate Board, representing 12 real estate boards and almost 18,000 Realtors.

Residential housing sales in British Columbia should rise slightly in 2011. The province's economy is showing improvement with more employment and a larger population. Metro Vancouver is one popular area where home buyers can find affordable houses. Most likely, property prices will continue to rise in the coming year. Yet Metro Vancouver is still expected to be popular with home buyers especially with first-timers.

Greater Victoria property values buoyed by economic recovery

Will The Real Estate Market Level Out In 2011?

If people have an interest in real estate on any level, they should track market statistics. At present, the industry is experiencing a recovery. Yet there will be continued speculation about whether the market will level out or climb to new heights. Real estate predictions – even on a local scale - are not an exact science. A regional market can be affected by varied factors including external influences.

What Are Your Predictions For The Real Estate Market In 2011?

Image courtesy of agentgenius.com

Dec 29

Global Real Estate Trends

by Mary Teresa Fowler
Global Real Estate Trends in 2010

As the current year winds down and 2011 approaches, readers can expect reports and articles about real estate trends to pop up everywhere. With so much trend-related content out there, our eyes can sometimes glaze over and we tend to ignore the latest list. Yet we should rethink our reaction to the barrage of year-end statistics.

Tracking Trends

Examining trends helps us to zone in on where we've been, gives us an idea of where we're going, and arms us with the knowledge to navigate the system. Real estate revolves around statistics. It is worth consumers' time and effort to examine the numbers and keep up-to-date about real estate trends.

Global Real Estate Trends

The Global Real Estate Trends report released by Canada's Scotiabank tracks housing markets in 12 major economies. The December report states that global residential property markets in 2010 experienced a modest but uneven recovery.


Australia fared the best with its housing demand and low unemployment. Slower sales and price appreciation, however, are expected for this thriving market in the coming months.


Meanwhile, Japan’s twenty-year property slump continued in the past year. In 2011, Japan's economy is expected to experience a further slowdown.


Stability is returning to U.S. markets. Housing demand is expected to rise with increasing employment numbers and continued low interest rates. Yet the Global Real Estate Trends report warns that housing demand might not translate into home sales. Within a recovering economy with a high unemployment rate (although shrinking), individuals and lenders are feeling uncertain and cautious about major financial commitments.


Despite a volatile market in 2010, Canada ranked high in the Global Real Estate Trends report.

Read about all 12 housing markets in the Global Real Estate Trends report.

Local Real Estate Trends

Potential home buyers and sellers should keep informed about state and local trends. Varied media (print or online) across the US and elsewhere publish information regularly about the latest real estate trends. The Washington Post tracks housing sales and prices in the Washington area. Each Saturday, the results are posted in their 'Real Estate' section. Information is collected for every residential zip code and the data is compared to the numbers during the corresponding period in the previous year.

Green Building Trends

'Green building' trends will make a noticeable difference to the real estate industry in the coming year. Regardless of uncertain economies, 'green building' is expected to rebound in 2011. New commercial start-ups will opt for green alternatives. Existing businesses will be making energy-efficient improvements.

This decision makes sense on many levels for businesses. Besides being environmentally-friendly choices, green businesses impress the modern customer. As well, residential buildings will follow this trend. Home owners want to live in a safe and healthy environment.

Parents and educators will also be advocating for 'green' schools. As part of the LEED system, the number of Certified Green Schools should increase as more people embrace the health and educational benefits of these buildings. By the middle of 2010, certified schools made up almost 40% of all new LEED projects in the US. In 2011 and beyond, the real estate industry will be seeing more 'green' buildings in all areas - commercial, educational, and residential buildings.

Green Building’s Top Ten Trends for 2011

What Do You Think Will Be The Top Real Estate Trends in 2011?

Image courtesy of hcrealty.com

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