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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?
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SOUTHERN NEVADA REALTOR ® MARCH 2013 www.LasVegasRealtor.com