Ahh, spring. Longer days, warmer temperatures, flowers blooming, the crack of the bat on MLB Opening Day, the NCAA Final Four and the Masters golf tournament.
You may be wondering how I have time to make deals with all the sports happening this time of year. It’s hard. But in light of how much screen time I spend, my thoughts these days are random.
Please stay tuned as I go through some thoughts that are clouding my consciousness. A famous person once said, “These are just opinions, but they are all mine.” »
Seller/buyer disconnection
Not long ago, we were immersed in a seller’s market. Demand from occupiers exceeded supply and sellers were optimistic.
Multiple offers were the norm. Asking prices were dropped for the dreaded TBD in case prices were too low and left money on the table.
The amount of buyer activity determined the final strike price. In order to compete in this frenzy, occupiers have been forced to shorten due diligence periods, abandon financing contingencies and apparently overpay. An announcement translated into a guaranteed salary.
How the world has changed in just two years. The only thing keeping sale prices relatively stable is the lack of availability.
The presidential election
I get asked quite often what to expect if Donald Trump is elected against President Joe Biden. Generally speaking, a Republican administration can portend tax cuts, increased defense spending, loosening government regulations, and the resulting economic boom. To the extent that this boom causes prices to rise, interest rates must be raised to calm the fever.
Conversely, there would be a Democratic administration with higher taxes, defense cuts, more regulation, and a weakened economy.
Yes. I’m oversimplifying. I hear the naysayers shouting that we have a Democrat in office and the economy is doing great. During our last Republican term, the national debt increased dramatically. The above are therefore only generalities.
At the end of the line. Who knows?
What’s happening now
Speaking of said economy, what’s new? Consumer confidence is high, more than 300,000 jobs were created in March and the participation rate is now close to two-thirds. Why do employers create so many jobs?
To be sure, many of the new jobs are in the service sector, where people spend money to dine out, take trips, and gain experiences.
Meanwhile, we expected the interest rate market to fall this year as we anticipated the Federal Reserve would begin its downward march as inflation came to a halt.
As of this writing, our benchmark 10-year Treasuries exceed 4.4%, which is bad for borrowers, good for savers. Beauty retailers are also taking action.
At the end of the line. Who knows.
Spring is synonymous with new beginnings. Another year and another batch of things to ponder. The results should be eventful for 2024.
Allen C. Buchanan, SIOR, is a principal at Lee & Associates Commercial Real Estate Services in Orange. He can be reached at abuchanan@lee-associates.com or 714.564.7104.
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