Jobs and strong economy aid commercial real estate market
What does commercial real estate have to do with jobs? Good question. But it might be more appropriate to ask what comes first, a strong real estate economy (both residential and commercial) or jobs that require builders and contractors to construct homes and buildings to house workers and businesses?
Its the jobs. Obviously, it’s business or government that creates projects that hire companies that need buildings to operate from so employees work in those buildings and then go home to their own homes at the end of the day.
It’s also the economy. When our local, state and national economies are booming, our commercial and residential needs, or demand, trend higher. When our economy enters a downturn, as we did locally in the fourth quarter of 2008, demand for real estate slackens and rents and sales prices also turn down.
But we’re here to talk about jobs because, as we all know, as the job base grows, so does the strength of our local economy. As the economy strengthens, so does demand for commercial and residential real estate. The old saying that a rising tide lifts all boats is true in sailing and real estate economics.
Our economy is cyclical and many of us in Western Colorado have lived through at least two booms and busts. The question we Realtors are asked quite often is, “When are we going to hit the bottom of this market?” One answer could be: “When the job market is so soft people are taking jobs in other locations where jobs are prevalent.” Another answer might be: “When housing prices stabilize and quit falling.” And still another answer could be: “When our government realizes that jobs are more important than excess regulation and leaders begin to offer incentives to companies and individuals who bring jobs to our area and our state.”
In Colorado we have a “culture.” We’re here because we love clean air, beautiful mountains and good jobs and we enjoy being around similarly minded people. We also enjoy outdoor sports, be it mountain biking, snow skiing, hiking, golf or just sightseeing. We love where we live and we choose to stay here … as long as we’re able. It’s our work or avocation — and our ability to prosper — that helps our economy to also grow and prosper.
We have a choice. We might look at the down economy as a situation that’s insurmountable. Alternatively, we — as individuals, a community and state — could look for the opportunity that always comes with a down economy.
It’s amazing that more millionaires were created during the Great Depression than at any other time in our country’s history. These were people who were forced to start a business or to go to work in a new industry, enter farming or invest in real estate. The one thing they had in common was a desire to improve their lot. And so they did. May history show that we Western Coloradans were of the same ilk as the pioneers in business and industry 80 years ago.
Every day is a good day to own commercial real estate if you manage it properly and profit in some way from owning it.