The REAL Market Update
This week we are going to head off in a little different direction and talk about the commercial real estate market (with a little residential mixed in). Unsurprisingly the commercial market in NOVA is in a very different state than the residential. COVID has turned the commercial market on its head and while some sectors will certainly take a long term hit some will just have to work their way through a transformation period of re-imagined usage. The office space market has really tanked as many companies going forward will have a much higher percentage of their workforce telecommuting. All those open space concepts will be tougher to implement but heaven help us if we have to go back to fields of cubicles! Some dedicated commercial space will likely end up being recast as integrated office, residential and retail/restaurant spaces. Malls are being particularly hard hit. People just aren’t going to big malls as much anymore, even though some like Springfield Mall have been very handsomely re-done. One space that is curiously booming is retail space. That is a testament to the strength of the consumer market in this region.
Commercial centers are contributing mightily to the tax base in some areas. Take for example Loudoun County. We all know they are one of the largest data center hubs in the entire nation. The taxes they will pay on their equipment this year will total 330 Million dollars! By 2030 that total is projected to grow to between 1.5 to 2.5 Billion. For reference sake the total 2021 budget for Loudoun county is 3 billion. Perhaps as the tax revenue increases Loudoun residents will see a reduction in their property taxes or a marked increase in services, or both.
Now let’s talk a little residential. How many of you are familiar with iBuyers? This refers to companies that use technology to assess the value of your home and then make offers sight unseen and then endeavor to turn a profit when they turn around and sell it. So far this year the model hasn’t worked very well. Zillow lost 266 Million in their IBuying program and Open Door lost 118 Million. Working with a long tenured professional agent (such as yours truly) still can’t be beat! In the mortgage rate market investors have flocked to bonds with the election uncertainty and nationally rates have dropped from an average of 3% last week to 2.625% today. I’ve been saying for a while that there is no bubble coming and to buttress that assertion I note that loans in forbearance reached a 7 month low this week.
If market projections are concerning you and causing you to question if now is a good time to buy or sell reach out to me and we’ll work together analyze the realities of the market and go from there.
It’s a good life.