It could be because it's an election year or the economy is slowly starting to rebound, but the outlook for Florida's commercial real estate market is improving according to a survey conducted by the University of Florida.
The quarterly survey is conducted by the Kelley A. Bergstrom Center for Real Estate Studies, and shows that first quarter 2012 respondents felt more optimistic because of the falling unemployment rate and an increase in activity in rental housing and occupancy. These are all positive signs to an improving Florida economy.
In addition, increased lending activity is making everyone feel more optimistic. Researchers who conducted the study feel that with so many loans coming due over the next year, real estate owners and investors are looking to refinance.
Improving this quarter were single-family and condominium development, apartments, industrial, land investment and capital availability. Also, occupancy in the premium office market was rated favorably among respondents.
While this news is good for the Florida market, respondents to the survey are also concerned about the upcoming presidential election and Florida's government financial situation. Significant policy changes would probably not be in place before the November elections and could cause an economic downturn in the state. Respondents are worried about the following issues:
- The Bush tax cuts and payroll tax break are scheduled to expire after 2012.
- There is $1.2 trillion in spending cuts set to take effect in 2013.
- The artificially low interest rates, inflation and that gas prices keep rising.
The outlook overall is positive, and respondent's are hopeful that the Florida market will continue to make measured steps until the presidential elections are completed.
Source: University of Florida News, "Florida's real estate professionals find reasons to be optimistic in first quarter," May 14, 2012