In 2007, everyone stopped building homes. For that matter, they stopped buying and selling homes, too. They weren't wanted; they weren't needed; and they certainly weren't in the budget. That wasn't the case, however, for commercial structures. Offices, malls, hotels and public institutions continued to be built throughout the year. These buildings seemed to feel very little of the economy's tightening, remaining strong and newly erected while everything else weakened.
Unfortunately, that's no longer true.
Current trends show that nonresidential construction is about to hit a standstill. Projects already in the works are tentatively continuing, unsure if they'll have enough funds for completion. And projects only in the planning stages seem to be ultimately doomed. In March, the number of nonresidential starts dropped by 23 percent; hotels dipped 67 percent, offices 28 and stores 18. Since the dip is relatively recent, it could be hoped that this is only temporary, but with the increased difficulty of obtaining a loan, the weak dollar and the high price of building materials, it's doubtful that's true. This won't be turning around any time soon.
That means the economy is only going to get worse. An estimated $250 billion is put into the economy annually by commercial buildings. Without them, there will only be a tighter squeeze - more strain on your wallet. Construction jobs will dwindle even more than they already have, and the real estate market will take yet another hit, making it doubly difficult to stay afloat, whether you are commercial or residential, buyer, seller or builder.
Hopefully, we'll all weather this storm adn come out stronger than we were before the tough times hit.
Joe
Selling a Home in Austin Texas | New Year 2008 Texas Economy Forecast
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