Property owners across Missouri are asking themselves if now is the peak for commercial real estate.
With Coronavirus and its impact on employment, prices for commercial property are likely to fall in the coming year. If you’re sitting on property looking for peak pricing, every passing day risks missing your opportunity.
The Federal Reserve Bank of St. Louis reports quarterly on commercial real estate prices. After the 2008 recession, prices decreased as much as 30% year-over-year. The drop took almost two years, bottoming in Q3 of 2009. Given Coronavirus’ sudden impact on employment and how we work, we may be in for a rapid repeat or even worse.
In the fourth quarter of 2019, Commercial Real Estate prices were up 7.197% from 2018. Q1 2020 seems likely to be flat vs 2019 and Q2 2020 will very likely reflect a sharp decrease in commercial property prices.
If you want to sell commercial real estate in 2020, you’ve likely missed the peak and may want to sell quickly before prices crash.
International Monetary Fund, Commercial Real Estate Prices for United States [COMREPUSQ159N], retrieved from FRED, Federal Reserve Bank of St. Louis; https://fred.stlouisfed.org/series/COMREPUSQ159N, April 13, 2020.