Buyer vs. Seller Conundrum

Donald Teel

Donald Teel

The notion of buyer’s market or seller’s market is a real phenomenon in any form of real estate investment.

Seldom can it be said that the market is both a ‘buyers’ and a ‘seller’ market simultaneously. But this seems the case as we prepare to enter the second half of the 2009 commercial market.

Pinching down on Buyers is the absence of simplified capital lending, something necessary to their investment strategies. Sellers are experiencing what I call “refi shock” as banks tighten their rules for lending qualification in the wake of declining property values.

The conundrum is realized as buyers and sellers are forced to work in a market that favors both. The conundrum is one of uniquely creative transaction partnerships, where neither the buyer nor the seller can pop the cork on a Champaign bottle and light-up a victory cigar.

The Buyer vs. Seller Conundrum

This paradox of market realities or, clash of interests, is actually a moment of investment opportunities where banks can become the third party servants to buyers and sellers.
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Prescott, Arizona…Per Square Foot

per-sqaure-footOne square foot = 0.09290304 m2.

Okay, now what about Prescott, Arizona’s commerical market on a per square foot basis? What does it mean to owners and buyers. Is it time to buy? Is it time to sell? If so, how?

My recent suggestion to my Broker didn’t go over too well. “What we should be doing is pricing property for sellers on a ‘per square yard’ basis and for buyers on a ‘per square foot’ basis,” I said. He grimaced…I walked away.

High Value Market

We are a high value marketplace. Commericial real estate values in Central and Northern Arizona generally and in Prescott, Arizona in particular are declining creating an interesting investor market. Indeed, we appear to be nearing the bottom of the trough and it is and has been for some time…a buyer’s market.

We won’t be changing the marketing analysis to a per square yard formula but the principle behind the notion spells out the reality.

Resisting the Market Realties

Some owner’s are resisting the truth inherent in the current makret realities and in so doing they are actually capitalizing the reduction of their property value.
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