[ 18 ] SOUTHERN NEVADA REALTOR ® MARCH 2013 www.LasVegasRealtor.com
COMMERCIAL ALLIANCE FORECAST 2013 [ BY TEDD ROSENSTEIN, COMMERCIAL ALLIANCE PRESIDENT ] The Las Vegas real estate market may be similar to the climate, which is different from weather of course. As this new year is already in full swing, the question still being asked of real estate professionals is what is the forecast for 2013? I have attended several professional outings since the end of 2012 (lunches, classes, orientations), and that seems to be the focus. What’s this year going to be like? Like the weather, a forecast is a look forward in time to predict some event or series of outcomes. Those predictions are supposed to be based in fact. And the descriptions that we have heard over the last few years are still being tossed around- terms like rock bottom, skipping along the bottom, historic lows, perfect storm, fiscal cliff, recovery shape (take your pick — V, M, W, and even the Nike swoosh). As real estate practitioners, we are constantly asked to make forecasts, to take the real estate temperature. Clients want measured outcomes, or they want to base buy/hold decisions on what they perceive the future will bring. So what do we say? And why? Back to my earlier point, I view the broad real estate market as a dynamic, cyclically functioning economic industry. And over the long term, we can look at past events to indicate the direction we are going in the future. So, to me that is more like climate — a long term historic view of the market, and its cycles. When we are asked to predict how any given year is going to be, I have to pause. Exactly what are we talking about, and specifically which market? As we know, there is a vast difference between the commercial real estate market and the residential market. When we speak of these and are specific to Las Vegas, we are starting to narrow the question to gauge a better answer. Then within the commercial market, we have product types (industrial, retail, office, to name a few), and we have submarkets (defined many ways — southwest, airport, zip codes, and so on). So I first really want to know what the question is before approaching an answer. And then, is this like predicting the weather, or are we being asked to gauge the climate? Here are some broad generalizations that can be discussed — interest rates for qualified buyers are very low, many properties being traded are doing so below replacement cost, and there is really no new commercial construction occurring in the Las Vegas market. So, will these factors stick around predictably like a five day forecast, or is this the new climate to come? CONTINUED ON PAGE 21 [ 19 ] SOUTHERN NEVADA REALTOR ® MARCH 2013 www.LasVegasRealtor.com