BY SWAIN WEINER
Everyone involved in the Queens commercial investment marketplace has been enjoying the upward trajectory for the last five years.
It is easy to understand: affordable housing (as an alternative to Manhattan), low unemployment rates for the county (4.4% as of Nov 2015 according to the Department of Labor, second lowest in the five boroughs), increased awareness of accessible transportation, the building of new schools and the demand created for new housing by young families all contribute to Queens’ popularity. These factors as well as low interest rates have created a thriving marketplace.
However, it does appear that the market has started to cool down. Overall sales in the county were down 18 percent from July-December 2015, versus six months earlier. Is this the beginning of a correction?
Federal Reserve Chairperson Janet Yellen just raised interest rates 1/4%, and now penciled in at least four more increases before the end of the year for a total of 1 to 1 ½ points. The markets are now in turmoil due to new lows in oil prices, stumbling Chinese stocks, and weak U.S. economic data. Low interest rates create a bubble over time that will burst. History has proven that a correction is imminent.
It is my opinion that the marketplace is headed towards a correction (if not in it already). There is a prevalence of uncertainty which leads to cautiousness in the marketplace and ultimately, lower prices. Be smart, plan ahead.
Swain Weiner is president, partner and founder of Greiner Maltz Investment Properties, which specializes in all types of commercial investment sales throughout the five boroughs and Long Island. Over the last several years, he has sold more than $600,000,000 in aggregate sales with more than 2,200 residential units.