Nobody is Perfect
By Craig Willett
There are not many individuals who have the ability to pick the “tops” of markets nor the “bottom” of markets. Don’t you ever wonder why so many people are buying stocks when the market is up? Why don’t people rush out and buy investments when they are tumbling? The elements of supply and demand dictate that very action, markets move higher based on demand and scarcity. Markets move lower from lack of demand and or oversupply of product. With the bidding wars pushing home prices up, the next move for office ownership will be up. The uptick in market activity for completed shell buildings is the highest it has been in nearly two years. With low interest rates and the drastic reduction in office prices – nearly 40%, the renewed demand is going to cause scarcity of well located office space. The weak businesses and business operators have closed their doors as victims of the economic downturn.
The time to buy office space is now. While nobody is perfect at picking bottoms, the decision to wait any longer to buy your next office is not likely to be rewarded with lower prices or costs. With the interest rates historically low, and all of the money being pumped in to revive the economy, a major uptick in rates in the next 12 months is likely. This event will increase your monthly payment (cost of ongoing ownership). Many banks have pulled their loans from developers not allowing them to finish buildings they have started. The uptick in demand and the lack of construction will leave very few choices for well-located office space.
While nobody is perfect, now is a great time to buy and the chance is high that you will reward yourself with lower payments than you would by waiting and greater appreciation by taking advantage of the economic circumstances that have lead to a 40% reduction in prices. Buying the right office space at the right time will bring great rewards.
