Measured Improvement in Commercial Sectors Expected

Despite sluggish economic growth and continuing concerns over high unemployment and the struggling housing market, the modest but steady improvement in commercial real estate in 2011 is expected to continue into 2012 and 2013, analysts told REALTORS® yesterday.

There’s some positive news, NAR Chief Economist Lawrence Yun said. Corporations are sitting on large cash reserves. The stock market is performing relatively well. Job gains—although still low—are slowly improving. And foreign buyers, attracted to the investment opportunities here, are in the hunt for properties, Yun explained. What’s more, investors appear to be looking to real estate as an inflation hedge, in part because the other traditional inflation hedges, gold and silver, are hovering at historically high prices.

The weak housing market, with financially strapped owners transitioning to rentals and young adults doubling up with family or friends rather than buying, is helping to fuel activity in multifamily properties, which is the strongest by far of the commercial property sectors, Yun said.

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