Wednesday AM August 25th, 2010
by: Ed Mayberry, August 25, 2010 3:08:00 am
It could be a repeat of the same pattern we saw after previous recessions. The lack of new construction and construction financing points to a fast rebound once the current stock is absorbed, according to real estate attorney Edward Mermelstein with Rheem Bell & Mermelstein in New York.
"Well, it's definitely dependent on certain markets. We're seeing the recovery in places like New York and Boston, discussions of recovery in areas like San Francisco and Chicago, as well. Definitely bouncing back a lot quicker than was originally anticipated."
Ed: "Current stock has to be absorbed, and I suppose that would be considered part of a rebound, if that's fast, also."
"There was a serious bounce back in '95 to '97, that was preceded by a lack of construction."
Mermelstein says Houston is a little different than the rest of the nation.
"Houston — and Texas in general — is protected from the rest of the country. We're seeing oil money supporting quite a bit of the real estate sector, so Houston and Texas in general is really not seeing that type of deflation in real estate simply because the business environment is somewhat different in Texas."
The multi-family residential sector is already showing a comeback, with recent government financial help. The hospitality sector is also improving in major metropolitan areas. But office space inventory is plentiful, and Mermelstein says it's not yet clear what direction things will take.