How Will Buyers and Sellers Bridge the Current Pricing Gap?
- Pearson RE Group
- Sep 28, 2017
- 2 min read
A perfect article from National Real Estate Investor (www.NREIonline.com) given where we find ourselves in the real estate cycle. NREI has a ton of great info on topics spanning the full spectrum of real estate investment. Definitely a great site to add to your list of faves...
"Investors still have a strong appetite for real estate, but still climbing property values are making them nervous about being able to execute on deals." Unless you've been hiding under a rock (see what I did there!?), you understand the widening gap between Seller price expectation and Investors' willingness to step up to meet such expectation. Could this explain some of the slowing transaction volume? What's the best way to satisfy both the Seller and Investor in order to transact?
Notable takeaways:
"...sellers are stuck on 2015 and 2016 pricing mode and are unwilling to sell if they can’t get the price they want...investors are wary about paying premium prices at this late stage in the real estate cycle....the investor community is tired of unreasonable expectations and spinning their wheels not knowing if there is really a seller at the end..."
"Prices are still trending upward for multifamily, office and industrial assets...there is still a lot of capital waiting on the sidelines right now, especially for residential, because multifamily is still the sweetheart..."
"...predicting that cap rates will remain relatively flat..."
"...The emergence of a bid-ask gap is fairly typical in the later stages of real estate cycles..."
"...Some sellers are looking for ways around that pricing gap...with low pricing guidance... [creating a] competitive bid process...we didn’t want to go out to the market with unrealistic expectations and not get the attention..."
"...On the buy side...value-add picking up...minimal capital...higher rental rate and a better ROI..."
"...money is by no means moving to the sidelines...need to adjust sellers’ expectations, and do it from the start. That will help bring sellers and buyers closer together...likely that gap will persist and create some softness...through the remainder of the year..."
Click here to read the full article on NREIOnline.com
Having difficulty getting your property sold? Looking to better compete as a Buyer in this hyper-competitive environment? Contact us today for proven strategies!
(949) 487-3178
Comments