The current state of commercial real estate remains solid, with several economic drivers seen as being responsible for this:
■ Low inventory of available inventory of existing starter homes
■ Inability of construction firms to meet demand for entry-level homes
■ Entrance of a new generation of homebuyer into the market
■ Growing demand for self-storage units
■ Repurposing retail space for hybrid offices
Severe Inventory Shortages Are Driving Prices Higher Across the Board
Never before has inventory within the real estate market become so problematic and constricting. It wasn’t 3 years ago that they were counties in the state of New Jersey that had available inventory upwards of 2 years’ worth in such counties as Camden, Gloucester and Atlantic.
Inventory shortages are causing price hikes in both for sale and for rent properties for the last two years. Due to these shortages of homes to buy, many first-time buyers are having to wait out the drought of inventory in rental units; as the growing cost of single-family homes have nearly increased by 50% over the past 3 years, rental units are showing the same price hikes in double digits. The formation of more family units, even demand for rental units going from one to two to three bedrooms, are also increasing and demand.
The National Association of Realtors projects that many multifamily investors are expecting strong demand and higher rents across the board. The trajectory and the momentum of the system does not seem to show signs of abating. Another reason for the demand in bigger rental units is the work-from-home economy, which is requiring that some families dedicate some serious space in their home for home offices.
Both Google and Amazon are increasing their real estate footprint as they look for office space and distribution facilities. Recently Amazon took over a former Sears location in Ocean Township, which had been struggling with slower retail sales for the Sears department store. In addition, self-storage units are being constructed throughout Ocean and Monmouth counties.
If you have any questions about this information or title insurance, please contact Ralph Aponte: 732.914.1400.
Counsellors Title Agency, www.counsellorstitle.net, founded in 1996, is one of New Jersey’s most respected title agencies, serving all 21 New Jersey counties with title insurance, clearing title, escrow, tidelands searches, and closing and settlement services for commercial or industrial properties, waterfront properties and marinas, condominiums, townhouses or residential single family homes. Counsellors Title also features its own Attorney Settlement Assistance Program™ [ASAP], which is an individual resource customized to fit the needs specifically of real estate attorneys, including, Documentation, Preparation, Disbursement of Funds, Attendance at Closing, HUD Preparation or Post-Closing Matters.