Property Grunt

Tuesday, April 26, 2011

Peering over the Abyss. Again

The waters are starting to churn a bit.

Killer Combo of High Gas, Food Prices at Key Tipping Point

Here are the key takeaways.

Food and gasoline prices are rising at a rapid clip.

That is bad because it will push us back into the recession.

Honestly folks, I am all out of jokes. But I will say that we should all walk very softly.

Taking stakes in buildings beats sitting on sidelines

According to this article because of the lack of inventory and large number of buyers, investors are jumping into partial investments where stakes are bought out or investors are injecting much needed cash into a property while allowing the owners to maintain their positions.

Scott Latham, a vice chairman at Jones Lang LaSalle claims that this is a good sign for the commercial market since it shows fluidity and that the demand is there because of the lack of properties, investors are more than happy to take up partial stakes.

I beg to differ. First of all, the reason why investors are purchasing partial stakes is that they do not have enough money to buy properties outright on their own. Also the the credit market is still licking its wounds. OPM are three initials you do not hear very often.

As for the the lack available properties, well, it depends on who you ask. You have to consider the shadow inventory and there is shadow inventory in the commercial market. It is being held back and it is being shown to select parties.

I have also been hearing a lot chatter about Manhattan's suburban counterpart Scarsdale. It is not all good. That town is hemorrhaging cash and there is talk to resetting the tax limit. When that happens, everyone is going to get hit in that town. Some harder than others. A huge barrier of entry in that town is the property taxes and they have gone out of control. There are a lot of people who missed out on the last bubble who are now putting their homes on the market. Property taxes are just not cutting it anymore as the town is seeking other forms of revenue. For more information on the tax situation go to this link. Or go to this link.

As some of you may have realized, my postings have been more erratic than usual. I am embarking on a new journey that is unrelated to real estate which requires a lot of my time and energy.

Despite these changes, I still feel the need to put in my two cents in this blog. I make no money from this blog and whatever fame I have incurred is miniscule and fleeting. But for some reason, I feel I have something to say.

For those of you who are sticking around, thank you. I really appreciate it.