Special offer

Did you notice that Equity Investors are pulling back on...

By
Real Estate Agent with Berkshire Hathaway HomeServices California Properties 01238708

I have noticed how Equity Investors are pulling back on the Commercial sector as the return expectation is fading. This is all the result of higher interest rates and of course the concern of potential recession.

This assessment is sadly spot on, as my business is mostly residential, with some Commercial land, I focus not only on what is going on in the Residential Real Estate Market, but what goes on in the various commercial real estate activities as well.

www.endrebarath.com

Well, what I have noticed is that lenders are more conservative when it comes to commercial deals. Generally speaking, the traditional real estate debt sources, such as banks and life insurance companies have decreased the leverage due to rising in interest rates and softening of economic conditions.

This should clearly be a concern to all, as construction costs continue to increase across all markets, this in turn has resect expectations and investments strategies. 

www.endrebarath.com

This will spill over to the Residential side of Real Estate as well... There is a warning to all investors that are willing to lend on real estate, that returns will be much lower than previously. This is all due to the higher cost of debt, pricing and let's be clear the real estate reports are trailing by two to three months behind unless you ask a local real estate agent. So, with today's speech from the Fed Chairman should send a warning to all.

www.endrebarath.com

Get ready to put on your seatbelts, my take is there will be soon an exodus of Real Estate Agents from the profession. In case you did not remember in 2008 we lost about 35% of all agents. Only the seasoned & knowledgeable ones will survive. 

The good news is serious buyers and sellers will benefit immensely if they step into the market now before interest rates continue to climb. 

www.endrebarath.com

Hate to remind you, but my father bought a home in the 1970's when interest rates were in the teens. He took too long to pull the trigger and wished he did a year before.... bottom line is he lived happily in his home as the rates climbed and his mortgage was the same and he kept reducing his loan and increasing the value of his home.

www.endrebarath.com

Wishing you a safe and healthy life and I look forward to your comments. If you are looking for a knowledgeable, focused and goal-oriented Realtor in the Beverly Hills area who will help you achieve your Real Estate goals, please reach out to me directly! If you are looking for a pet friendly Beverly Hills Realtor who can handle and sell the most difficult properties that no one else could, please reach out to me directly!! If you are considering buying or selling a home, a luxury home, luxury investment real estate, luxury vacation homes, or luxury beach properties in Southern California, Los Angeles, Century City, Westwood, West Hollywood, Beverly Hills, Marina Del Rey, Venice or Malibu, feel free to contact me at 310.486.1002 ( m) homes@endrebarath.com or visit one of my websites at https://www.endrebarath.com I contribute a portion of my commission to local animal rescue organizations. Endre Barath, Jr. Realtor at Berkshire Hathaway HomeServices California Properties DRE#01238708

Comments (13)

Charles Ross - eXp Realty LLC
eXp Realty LLC Salina Group - Salina, KS
Love To Help People

Love the Information. Thank you for sharing. Have a wonderful day and a blessed week.

Mar 08, 2023 01:49 AM
Brian England
Ambrose Realty Management LLC - Gilbert, AZ
MBA, GRI, REALTOR® Real Estate in East Valley AZ

The news these days seems to be all doom and gloom and it seems unnecessary to me, too many agendas being pushed and too many followers of those agendas, ugh.

Mar 08, 2023 03:56 AM
Nina Hollander, Broker
Coldwell Banker Realty - Charlotte, NC
Your Greater Charlotte Realtor

Exactly what I was thinking yesterday, Endre, after I heard Powell's comments -- don't delay. Do it now!

Mar 08, 2023 04:03 AM
Kat Palmiotti
eXp Commercial, Referral Divison - Kalispell, MT
Helping your Montana dreams take root

Great message to get out there to anyone planning an investment - don't wait.

Mar 08, 2023 05:12 AM
Wayne Martin
Wayne M Martin - Chicago, IL
Real Estate Broker - Retired

Good morning Endre. The experienced savvy agent will continue to work with experienced savvy investors on the sale and purchase of real estate. The inexperienced speculators and their agents will ride off into the sunset. Inexperienced people will panic and that create opportunity for the savvy few. Enjoy your day.

Mar 08, 2023 05:26 AM
Lawrence "Larry" & Sheila Agranoff. Cell: 631-805-4400
The Top Team @ Charles Rutenberg Realty 255 Executive Dr, Plainview NY 11803 - Plainview, NY
Long Island Condo and Home Specialists

We don't deal in the commercial end of this business Endre, but we do see the changes happening with investors/flippers. It's not as good as it used to be!

Mar 08, 2023 06:04 AM
Anna "Banana" Kruchten

Same here, investors or flippers are way way down as well as ibuyers.

Mar 08, 2023 10:31 AM
Debe Maxwell, CRS
Savvy + Company (704) 491-3310 - Charlotte, NC
The RIGHT CHARLOTTE REALTOR!

The Wall Street companies have pulled back considerably here as well, Endre. We are seeing a resurgence of multiple Offer scenarios this month so, it's a great time in our market to sell...and if you're a buyer, it's back to "On your mark, get ready, BID!" There's no sleeping on Offers in this market. People are taking heed and in order to avoid those increasing interest rates, they are BIDDING!

Mar 08, 2023 08:44 AM
Anna "Banana" Kruchten
HomeSmart Real Estate - Phoenix, AZ
602-380-4886

Endre I just got off a zoom call with our top market watcher here in the PHX area.  Our market is still a slightly seller's market. Inventory is down but pendings and closing are up. Which is exactly what I've been tracking in our niche. We're not in the frenzy market as I called 2021 & 2022. Thank goodness. As for commercial buildings- I don't follow that closely but - holy smokes there is so much building going on here. I see cranes all over.  So we'll see where things go. 

Mar 08, 2023 10:30 AM
Jerry Newman
Brown Realty, 210-789-4216, - San Antonio, TX
Texas REALTOR, San Antonio Military Relocation

Hello Endre Barath, Jr. It's nice to know and to see that you also follow what's going on in the commercial sector of real estate land in your area. You have given some sound advice about not waiting on those interest rates. I remember the 80's and 90's when rates were way higher than they are now. 

Mar 08, 2023 12:24 PM
George Souto
George Souto NMLS #65149 FHA, CHFA, VA Mortgages - Middletown, CT
Your Connecticut Mortgage Expert

Endre real estate has always been a good investment, and will continue in the near futher.

Mar 08, 2023 03:13 PM
Kathy Streib
Cypress, TX
Home Stager/Redesign

Hi Endre- what you say makes  logical sense and I say ditto to what Wayne Martin commented. 

Mar 08, 2023 05:54 PM
Patricia Feager, MBA, CRS, GRI,MRP
DFW FINE PROPERTIES - Flower Mound, TX
Selling Homes Changing Lives

Endre Barath, Jr. - I had a meeting with a local Lender this past week and she said a lot of what you mentioned. Also, construction costs are rising here and there are still lots of delays. We all need to pay attention and tighten up our belts and hang on for what's coming. 

Mar 11, 2023 03:43 AM
Rocky Dickerson
Realty One Group - Las Vegas, NV
Superior Service!

Yeah, I just noticed a 4 story commercial complex that used to have hundreds of cars parked there every day. Now it has 3.

Mar 12, 2023 10:57 AM