Real Estate Construction Spending Dips, Commercial Nosedives
Real estate construction spending
In predictable fashion, construction spending continued to decline in November of 2009, reports the US Commerce Department. Total spending declined and some sectors were harder hit than others while residential real estate construction spending fell just under 20% from November 2008 (a less grim number than the 23% year over year drop experienced in October) while commercial construction spending nosedived 40%!
Commercial construction spending only dropped 1% in November from October but overall, it nosedived a heartbreaking 40.5% from November 2008. Do you think the commercial sector was overheated in the first place, making this a predictable drop or is it because CRE is more dependent on the global market than the residential sector?
The statistical data:
Below are the real estate sectors we most closely monitor and the changes they are going through regarding construction spending with the universal verdict being that the numbers are dropping gradually this fall yet in comparison to the same time last year, the dip is pretty severe.
We’ll continue to see these numbers slide gradually but the worst may not yet be here for the commercial real estate sector. It will be interesting to see how the general contracting firms react during this down time.
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This article published on Tuesday, January 5th, 2010 at 12:02 am | Contact the editor
Topics: Commercial, News
About this Columnist (Full Profile)
AGBeat Editor-in-Chief: Lani, named one of Real Estate’s 100 Most Influential, as well as 12 Most Influential Women in Real Estate, is a business writer hailing from the great state of Texas in the city of Austin. As a digital native, Lani is immersed not only in advanced technologies and new media, but is also a stats nerd often burried in piles of reports. Lani is a proven leader, thoughtful speaker, and vested partner at AGBeat.
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- RealEstate Babble:
AgentGenius: Real Estate Construction Spending Dips, Commercial Nosedives http://bit.ly/6iWEOq Full http://bit.ly/5LbS66
- jim hellorinds:
new blog post: Real Estate Construction Spending Dips, Commercial Nosedives http://ow.ly/16gJgF
- Lisa Murad:
Commercial construction spending nosedives 43% year over Oct.2008 http://bit.ly/520xlO
- AgentGenius:
agentgenius.com NEW Real Estate Construction Spending Dips, Commercial Nosedives http://bit.ly/7CTb7P
- Real Estate Feeds:
Real Estate Construction Spending Dips, Commercial Nosedives: Real estate construction spending
In predictable fash… http://bit.ly/7CTb7P - topsy_top20k_en:
AgentGenius: Real Estate Construction Spending Dips, Commercial Nosedives http://bit.ly/6iWEOq Full http://bit.ly/5LbS66
- Pending Home Sales Drop, Housing Market Too Reliant on Government?:
[...] telling news of pending home sales down as well as news of construction spending dipping, The Fed will have to get involved to change the course of this mammoth ship and the Government may [...]
- AgentGenius:
#agnow [...] telling news of pending home sales down as well as news of construction spending dipping, The Fed will… http://bit.ly/8sULLR
- AgentGenius:
#agnow I have been talking to Naples developers about their marketing strategies and found out an interesting trend… http://bit.ly/8sULLR
- AgentGenius:
#agnow Due to the capital markets, commercial projects all over the country have been suspended in progress, tempor… http://bit.ly/8sULLR
Benn Rosales
Conal Campbell
Elijah May
Lani Rosales
Tara Steele
Marti Trewe
Charlene Jimenez
I have been talking to Naples developers about their marketing strategies and found out an interesting trend – there is a definite room for building single family homes withi $300K range. They will definitely sell. By the way we are running out of condos built after 2000 and older condos don’t sell that well unless it’s an absolute “steal”. So I think we will see some building activity in the nearest future in Naples Florida.
Due to the capital markets, commercial projects all over the country have been suspended in progress, temporarily pulled from the cue, or shelved indefinitely. From consumers, to office tenants, to commercial building owners, it’s an environment of making due the best one can while maybe putting on a fresh coat of paint.
Vacancy is plaguing all property classes.
The bottom line: No new jobs = No new demand = No new construction.
Put the hostage Stimulus dollars to work in the economy’s job engine, the Small – Medium Business sector, and we might have a chance.