2011 will be the year we begin the recovery for a successful 10 year run. If we can get 5 strong years out of a 10 year real estate cycle, we will have been successful. Historical numbers show we did just that in the 80s, 90s and from 2000 to 2010 and we expect the same trend as we head to 2020. So plan on 5 strong years and work, plan and prepare to make the other 5 ok and not awful.
We continue to have serious challenges with $1.4 trillion in National commercial debt coming due between 2010 and 2014. Commercial owners are returning keys to banks (you may have heard the term “jingle mail”), and employment rates that are not expected to improve much this year. Past downturns have been based on over building, but this downturn is clearly Global, based on over leveraging and record setting job loss.
But there’s not a better place to be in the country. Our market, as it has in the past, will recover more quickly than other markets, and our State and region give us reason to have confidence in the recovery. This year expect:
• Vacancy rates to start trending down
• Could be a supply problem is some submarkets
• Rental rates to hit bottom
• Absorption to remain flat
• No speculative construction anytime soon
• Investment sales up another 40 percent, and
• Land prices to now reflect true values.