2005 , 2006 ,2007
,
2008 ,
2009 and 2010 forecast
Merabi & Sons Overview, and the forecasts for
2008 (Looking a Bit Cloudy):
Everybody from Boston to San Diego are asking what is going on with
Real estate?
Well, we at MAS believe when your shoemaker , your mom, your doctor,
your dry cleaner all started to invest in real estate with no
knowledge or little about the real estate and the banks
irrationally lending money at 120% of loan to value of the real estate
they purchased , this is what you get – the puzzling direction that
over which way the real estate market is headed. Up or down? Bubble
or not? Correction or not ?crash or not?
It's a debate that's been raging ever since June 2007 and recently that
there have been clear signs of a slowdown. It's unlikely,
however, that the housing market gets better ,we believe that the
worst is yet to come late 2008 or after the election. Therefore we
are not investing in any kind of residential for 2008 and perhaps
the first quarter of 2009.
However two month ago on October 24, 2007.
According to Grubb & Ellis during a morning news
conference in New York City, the slowing economy should cool down
the U.S. commercial real estate market in 2008, but the four main
real estate sectors should remain relatively healthy next year.
(according to Michael Dee, Grubb & Ellis' senior vice president.) in
the residential sector we at MAS disagree with him. Nationally, the
overall outlook seems reasonable: 7 percent appreciation for 2006
and flat for 2007. But markets that have seen the greatest
appreciation over the past five years appear to be vulnerable.
Indeed, at some point in the next two years, a third of the nation's
100 largest metro areas (accounting for 60 percent of the U.S.
population) are expected to see modestly falling house prices. Real
estate bear markets often come in the form of steady declines over
many years, rather than sudden sharp drops.
On the positive side, office development has been under control
according to Bach. Net office absorption should remain
positive-about 48 million square feet in 2008, off by about 20
percent from 2007. Bach predicts office vacancy by the end of next
year should be 13 percent, about the same level as this year. Office
Vacancy was lowest in Manhattan at 4.9 percent and highest in
Detroit at 21.7 percent among the major markets tracked in detail,
Vacancy rose most sharply in Orange County, Palm Beach County and
the Inland Empire (the Riverside area east of Los Angeles), all of
which have a high percentage of office tenants related to the weak
housing sector , according to Grubb & Ellis. We at MAS , believe that
real estate commercial office building would slow down but it would
not crash like the construction and housing would do, therefore we
are investing in commercial office buildings in AAA areas.
Retail leasing rates should stabilize in 2008 While leasing at
regional malls should continue to remain strong. Also some strip centers
may see some increase in vacancy. Retailers that are dependent on
the housing sector, such as home furnishings stores, could see
slowing sales. We are very optimistic about retail and are looking
to invest in malls and strip centers.
BARGAIN
That is what we are looking for in residential market or new
construction BARGAIN.
All of our thought and predictions above means that the health and
direction of the REAL ESTATE in the US market matters not only to
firms directly in the REAL ESTATE market, but also to the overall
economic health of the united states of America .
Kami A. Merabi LA
12-24-07
Merabi and Sons, the premiere Real Estate Company in the world. |
