The Current Real Estate Investment Trends
Current Trend #1-Commercial Real Estate Investments Are Up
As far as current investor trends, a quarterly market trends report from the CCIM noted that commercial investments are increasingly popular among investors and the first part of the year has shown an “upbeat sales pace.” According to Real Capital Analytics, the first quarter of this year has shown a total of $74.2 million in major property transactions in the United States. This is a 37% increase from last year. Properties under $2.5 million rose at 5% on a yearly basis.
Current Trend #2-Unemployment is Down
The unemployment numbers are definitely playing a role in bolstering the Long Island real estate market as a whole. US employers added 162,000 jobs in July which served to bring down the national unemployment rate to a 4 1/2 year low at 7.4%. Long Island’s unemployment rate is well below the national average at 6.8%, with Nassau coming in at 6.4% in Nassau and Suffolk at 7.1%.
Unemployment trends are very good news indeed. As unemployment statistics continue to improve, so does the commercial real estate market.
Current Trend #3-Changing Interest Rates
The average US rate on the 30 year fixed mortgage rose this week to 4.5%, making this a two year high on expectations. The Federal Reserve will slow its bond purchases later this year.
What should we expect for interest rates? As we transition to our next Federal Reserve Chairman (or more likely Chairwoman, Janet Yellen), look for higher interest rates as the Federal Reserve gets closer to their target of 6.5% unemployment to ease the $85 billion per month in assessment purchases.