Commercial Properties Did Well Amid Foreclosed Residential Concerns

by on Foreclosures

The number of foreclosed residential properties in Western New York continues to cause concerns among local analysts. All in all, however, the region's real estate market is doing well, particularly the commercial property sector. Vacancies among office buildings, retail locations and industrial spaces maintain a rate that can be categorized as stable.

Bank foreclosures in Staten Island and in most parts of New York might not be as high as in other states; but the region, just like every single state in the U.S., was not spared from the housing market crisis that started around four years ago. However, areas like Western New York are doing much better than others when it comes to the commercial property market.

The region has its own share of oversupply of New York bank foreclosures, but its commercial property industry was able to maintain stability, with vacancy rates for industrial, office and retail ranging from 11 to 13.5%, a range considered stable by most real estate experts, particularly at a time when the real estate industry is under duress in almost all regions of the U.S.

Foreclosed residential properties are still weighing certain areas' housing market down, but among multifamily dwellings and condominiums, activities are starting to pick up, according to realtors. For 2011, housing analysts are predicting a better time for the multifamily dwellings segment and condominium markets. Student housing and senior citizen residences are also projected to be better this year.

However, analysts also cautioned that any improvement will be minimal, primarily because of the continuous supply of bank foreclosed properties entering the market and tight credit standards. According to them, this would seem to be the trend for 2011, with areas in the U.S. that have chances of improvement only able to achieve it at a minimum level. They stated though, that a slight improvement is better than no improvement at all.

Meanwhile, some realtors are expecting vacancies among downtown commercial properties to rise slightly this year, mainly due to the expected business closings and further increase in foreclosed residential property numbers. However, factory outlets and retail stores are expected to continue their growth and will likely offset whatever vacancy is recorded in the downtown market.

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