Commercial market to be healthy for 3 years says report
Economic conditions should mean a healthy level of growth for the commercial real estate
industry through 2017. That’s the conclusion of a study by the Urban Land Institute (ULI) Center for Capital Markets and Real Estate. The report is the result of a survey of 49 top economists and analysts from industry organizations. The latest reading of the years ahead is less bullish than a previous report in April 2015 but says that there should be three years of favorable conditions for the market. Commercial volume to rise for next 2.5 years with prices up 10 per cent in 2016 and 6 per cent in 2016.
For apartments, vacancy rates are expected to increase slightly to 4.8 per cent in 2016 and 5 per cent in 2017; however, these forecasts remain below the 20-year average vacancy rate. Apartments are also expected to show consistent rental rate growth above the 20-year average of 2.7 per cent. Rents are expected to rise by 4.6 per cent in 2015, then moderate to 3.5 percent in 2016.
Mortgage rates largely flat says Freddie
The weekly barometer of average mortgage rates from Freddie Mac shows that they have been largely unchanged in the week ending Oct. 1 2015. 30-year FRM’s averaged 3.85 per cent, down from 3.86 per cent last week; 15-year FRM’s averaged 3.07 per cent, down from 3.07 per cent; 5-year ARM’s averaged 2.91 per cent, the same as last week; and 1-year ARM’s were also unchanged and averaged 2.53 per cent.
Freddie Mac’s chief economist Sean Becketti commented: “This marks the tenth consecutive week of a sub-4-percent mortgage rate. Despite persistently low mortgage rates, the pending home sales index dropped 1.4 per cent in August, suggesting possible tempering in existing home sales in September."
Developer confident of $130 million penthouse sale
A New York developer is optimistic that a buyer will be found for a penthouse with a whopping $130 million price tag. The home is part of a tower at 520 Park Avenue where prices start at $30 million. Targeted for completion in 2018 the 54-story tower will comprise 33 full-floor units and five duplex penthouses. The ‘basic’ units will have 360 degree views and 5,100 square feet. Whoever has an extra $100 million to snap up the premium penthouse will have 12,400 square feet inside with an extra 1,700 square feet outside.
Developer William Lie Zeckendorf told CNBC that most of his buyers are still from the tri-state area and says that the price is right: "Probably more likely now than ever. We are seeing more and more interest in New York City from across the world, we're also seeing record-breaking prices being paid by New Yorkers.”