Bill Gladstone > Articles > Is It Still A Tight Sale Market?

It used to be that you couldn't find a property to buy because the short-term interest rates were so low; even tenants wanted to be buyers. This made the market extremely tight. But now that interest rates are rising, is this still the case?

The answer is no; the market still remains very tight. Now you might be wondering, if the rates are still going up, why is the market still so tight? Keep in mind, short-term rates are not the basis for real estate loans. They are based on the long-term rates, which are still uncharacteristically low. However, short-term rates have affected many other aspects in our daily lives. The “buying spree” has slowed, as other items in our economy have increased in cost. A new perception has set in with the few people that still wanted to buy something before “the bubble burst.” However, there was no product for these individuals to purchase. So with the demand remaining high and the supply limited, the prices remain very high. This will probably go on for another six to nine months until the interest rates start to rise even higher and the final demand will be weakened further than it is today. Then perhaps, the supply will equal the demand.

Overall the in Harrisburg market, the sale activity is starting to balance out with the leasing activity, as the leasing activity starts to pick up. There are some very good deals going through the market, sizes larger than our average 2,500 to 3,500 SF deals. As the current activity continues, I see the leasing market in Harrisburg getting better at the expense of the sale market.