Just recently, we caught up with a renowned real estate lawyer in Houston. Here is a quick look at what he feels about the real estate market.
What trends will the real estate market witness in the year 2014?
The lawyer told us that he expected many trends in the market. Of these, the most prominent trend is probably the construction of new properties in Houston’s downtown area. There are already ongoing projects in this regard, but 2014 is going to see more of these. Most of these projects are for energy companies and other firms that belong to the same industry.
What were the most surprising events that took place in the real estate industry this year?
2013 saw a lot of new real estate trends both in the commercial and residential area. New mortgage laws, increased permits for condos, and tougher lending practices are only a few. Considering the commercial side, the most notable occurrence is probably the re-emergence of structured financing techniques like credit tenant leases and synthetic leases.
Until 2011, all of these were often talked about, but then somewhere the popularity died down. In the last two years, more of these have been seen for the investment grade companies and other huge construction projects. It would not be a surprise if next year an increased number of these are seen in the real estate market.
What are the most notable changes the industry has seen in recent times?
The most prominent changes that occurred in the real estate industry include the amount of development that has taken place in the commercial sector. This is true for not only Texas, but other regions as well in which the job growth is not that high. Investors are also keen on making use of riskier strategies than the relatively safe ones implemented in the past. If all these projects are successful, they will be regarded as a very important addition to the market and should they fail, the impact of risks would require eons to recover.
Moreover, renting is also becoming more common which is a sort of surprise when the historically low mortgage rates are considered.
In a nutshell, positive predictions can be made for the real estate market in 2014, but only time will tell if they turn true or not.
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