ARE THINGS GETTING WORSE

As of this posting, February 14, 2008, we have been getting a steady stream of unsettling financial news from all sides. The D word is being used more and more.

The stock market dropped then has regained slightly but is still significantly down. GM announced a $39 billion loss for last year, Fed Chairman Bernanke has said that he is prepared to keep reducing the bank lending rate to keep the economy moving and the President and Congress are trying to decide how big a stimulus program to institute.

Things sure seem bad. Strangely enough though, the commercial real estate market is still chugging along like the little engine that could. True things are not like the recent past but they aren’t like the dark ages of the early and mid 1990s either.

Rents are still going up, occupancy levels have decreased in office properties due to the mortgage companies that have bailed but retail and industrial occupancies are still hanging in there. Apartments are still doing well in general. However, that market is skewed with all of the high end units that have come on stream in the past couple of years together with the condos that couldn’t be sold being converted to apartments.

Right now it seems like the Orange County commercial real estate market is going to squeak through the current economic mess in fairly decent shape. There are no mass foreclosures going on, in fact there are almost no foreclosures of any kind going on in the Orange County commercial real estate market. You can prove the point by calling any major bank and asking for a list of their commercial foreclosures. There aren’t any.

So if you are an investor in real estate, don’t get depressed. Maybe you shouldn’t read the newspapers either.

Tags: forclosures, orange county real estate