An update on US Realestate – stability in residential and calamity in commercial
Joe Weinman
Jun. 29, 2008

The realestate market in US is taking a strange turn again. With the $142 oil, the market place is changing fast again.

The residential sector is still depressed but not going down anymore. The prices have finally cracked. The buyers are back with lower rates and a lot of skepticism. New homes sales are slowly creeping back as builders build cheaper and more energy efficient homes.

The problem however lies in the commercial real estate sector. Businesses have started dumping unnecessary jobs at a massive rate. Economy is sinking with low business and consumer confidence.

The small business that form the backbone of American economy have decided to take their office spaces back to their homes, consolidate their finances to make sure they can pay their residential mortgage bills.

High gas prices has caused employees and entrepreneurs to start working from home with their telephone, Internet and Blackberry.

The net result is stability in the residential sector and a calamity in commercial sector. Soon the office space vacancies will skyrocket and office rent price will plummet.

Residential rents are also in trouble as more and more people will buy homes (possibly new homes) and start home based businesses.

Another interesting thing happening in the Malls. Small mum and pup shops are also going on the Internet. That is causing massive vacancies in the mall segment of the market.

Simply put residential realestate will rebound modestly with new home coming back strong. But the commercial segment will collapse over time.

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