Despite the general grimness of the market, there is good news. One of the saving graces in Sarasota has been that we did not overbuilding in the commercial market. The value of building condos was too great in 2004-2006 to consider straying into commercial development. The Urban Land Institute makes some good observations:

In terms of commercial real estate, while vacancies are up in all market sectors, relatively little overbuilding has occurred, with the exception of the retail market, Nadji said. As a result, while the office market has been affected by high job losses, vacancies are not as severe as they would have been had an excess of space been built prior to the recession. There are lucrative purchasing opportunities in the office market for those who are in a position to buy, he noted. Despite the layoffs in the financial sector, New York City, with a vacancy rate of about 10 percent, tops Marcus and Millichap’s list of healthy office markets. Detroit, with an office vacancy rate exceeding 25 percent, ranks as the worst.

In the commercial market, the apartment sector shows the most promise in terms of a rally, with as many as five million echo boomers entering the housing market starting in 2011, the panelists said. With apartment construction at a standstill and few new projects planned, demand will outstrip supply when the economy improves, and echo boomers start getting jobs and “stop living with their parents,” Nadji said. New York City currently top’s Marcus and Millichap’s list for apartment markets, with a vacancy rate of under 4 percent, while Jacksonville ranks as the worst apartment market, with a vacancy rate of nearly 13 percent. 

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