Reports that the Federal Reserve Bank may be considering a significant interest rate hike in response to a perceived bubble in the commercial real estate market have sparked concern among some analysts. Builders and construction firms across the U.S., however, are expressing cautious optimism and continuing to expand their projects to deliver housing solutions, office space and other commercial real estate solutions for their clients.

Apartment Complexes Singled Out

One issue that may be drawing attention from administrators at the Federal Reserve is the elevated vacancy rate in many newly built urban high-rise apartment buildings. Market analysts are already predicting an increase in commercial delinquencies of more than two percent for 2017. This has prompted a tighter hold on the purse strings by lenders and the Federal Reserve alike.

Putting Plans on Hold

Some major developers have already pulled out of potentially lucrative deals to prevent these predicted losses. In most parts of the country, however, an uptick in demand for commercial real estate is continuing to bolster the economic recovery and is providing added jobs and profitability for savvy builders.

Moving Ahead with Optimism

Even if the Federal Reserve does opt to increase mortgage interest rates, most builders will see minimal change in their business model and will likely experienced increased demand for their services in the current economic environment. Acuity National Real Estate Solutions can help with the most advanced solutions for managing lending arrangements, investments, buyers, sellers and brokers in the modern real estate industry.

Commercial Real Estate Services from Acuity

To learn more about the full line of commercial real estate services offered by Acuity National Real Estate Solutions,?visit us online?or give us a call at 502-238-7500. We are here to serve you!

We live in an age where success in real estate is always tempered by caution. Fear of the next housing bubble is palpable. That?s an enduring legacy of the last housing crisis, and it may stay that way for some time. What this cautious optimism doesn?t give us is a real picture of the health of different housing markets.

A recent article in HousingWire pondered: ?Housing in the state of Texas was hotter in 2016 that it?s ever been before, but is real estate in the Lone Star state getting too hot?? The author then goes on to note that home prices in multiple markets ? Dallas, Las Vegas, Phoenix, Portland, Atlanta, Los Angeles, Miami, San Francisco, and Tampa ? are rising too quickly and are exceeding the supporting economic fundamentals.

What is a Housing Bubble, again?

But here?s the thing: overpriced homes aren?t the hallmark sign of a housing bubble. The definition of a bubble is when people drive up prices simply because they expect the price will continue rising indefinitely. With that logic, no price is too high.

But here, in our reality of 2017, supply and demand are the driving forces at work, and that?s economics 101. Plus, debt is still well below the peak of the 2006 bubble. What economists do expect is a rebalancing of the market. Home prices will slow their gains in some areas, while values will decline slightly in others. Statistically, we are due for a recession. But not for a great recession.

Title Services for Today?s Market

Acuity National Real Estate Solutions is a national title agency offering cutting-edge tools to help lenders reduce cost, streamline closings and increase compliance. For more information, please visit our homepage today!