Friday, September 09, 2005

Investment Real Estate Prices

Dear Readers,
As the effects of Hurricane Katrina rage throughout the economy, I have been contemplating how this is going to affect our Wenatchee area real estate market. Our national economy is so intertwined, we can't kid ourselves into thinking it's not going to affect us here in the Wenatchee Valley.

For example, there is an ever increasing demand on the reduced supply of building materials and other supplies. As petroleum prices increase, building supplies cost more to produce.... and it costs more to get them delivered to their ultimate destination. There is going to be a huge demand through the hurricane ravaged area and we are going to pay more for supplies and labor. The reality of prices based on supply and demand will never be more obvious.

There has been a surge in multi-family investment construction in our local market area. The above factors are going to significantly affect the future construction costs of such projects. Will they continue to develop or will this slow the trend? Will existing investment properties become a more attractive investment or will they go up in value to reflect the potential reduction in competition?

So many questions. So few answers. Stay tuned.

Have a great week-end!

1 comment:

Krist said...

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