Are We At A Real-Estate Peak?
Recently I attended a networking event where the top executives at various commercial real-estate firms attended. As one executive put it: "we are in extra-innings in a double header" meaning the extended growth cycle in commercial real-estate is on going & long vs historical standards. The financial analyst in me took that as its good now but will it last? Looking at the chart below (CRE is commercial real-estate loans while C&I commercial & Industrial) is it seems it has already peaked for the nation although maybe not Charlotte yet. The takeaways from the panel, in my view, was continued cost pressures in construction has resulted in an affordability gap in Charlotte on the residential side while financing on the commercial side has tightened....all indicative of late cycle phenomena. What was most interesting is that multi-family unit availability in Charlotte is expected to grow 20% over next 12-24 months almost double the normal rate. Its not surprising that nationally multi-family units as we discussed in prior articles has been weak nationally for some time. Maybe Charlotte is finally catching up as huge capacity is added. This has implications for individuals renting investment properties and to some extent overall real-estate prices as rent prices slow. As we long maintained there are clear signs real-estate demand & price appreciation has slowed or about to slow tied to higher rates and other factors. The recent mortgage application data to name one in recent weeks has confirmed this in residential. So business owners and individuals alike should plan their finances accordingly. To gain from our insights please contact us or sign up for email updates via https://www.charlotteconsultantservices.com/news-update.