In a recent blog post at oregonbusiness.com, Oregon economist Bill Conerly analyzes the state of the real estate sector. His conclusion: the past isn’t necessarily prologue.
In past economic downturns, property owners and developers at the low end of the economic cycle will forecast recovery and begin to bring new construction projects online. This allows building supply to meet demand when the economic recovery is underway.
Mr. Conerly is not seeing that happen. Because of a variety of factors — not the least of which is the financial turmoil facing Europe — near-term demand for new buildings supplying office space to a growing traded sector is still very weak.