Commercial Property Market Update

As the price of commercial property and the amount buyers are willing to pay has seemed to have increased, January of 2008 has seen a major dip in commercial sales volume.

In 2007, office market portfolio sales were recorded at over $10 billion. In January of 2008, only $413 million was reported. In quantity, 2008 saw a decrease from 42 office properties trading in the prior year to only 8 tradings.

Manhatten, home of Donald Trump, and reportedly going full guns when he spoke on Larry King's nightly show last October, has dropped to $613 million from $6.14 billion. The do report another $5 billion under contract, however.

San Francisco reported an increase in office sales, and was the only US commercial market to do so.

Conversely, more than $10 billion of office property was listed for sale in the month of January, which was the highest amount since the beginning of the last quarter in 2007. February listings are expected to be even higher, yet buyers are not willing to pay what sellers are asking, and neither seems willing to compromise.

Industrial markets also fell in sales to below the $2 billion level, for the first time since 2005. Closings dropped 65% from 2007 and are expect to dip further in February after new listings lessened as well.

Commercial apartment sales dropped 47% from 2007 as well, with monthly volume lower than any since 2004. Sellers seemed to disregard the decrease in sales, and the number of apartments put into the sales market in January INCREASED a whopping 84% from 2007.

While sellers are holding strong to their prices, the pressure to ask less is increasing and buyers' resistance is growing. Investors are uncertain and wary of the market as well, hoping that time will bring a price reduction. Though credit is cited as a contributor of the residential real estate slowdown, market uncertainty seems to be the driving force behind the commercial market stagnation.

If you are interested in Myrtle Beach commercial property or 1031 Exchange services, we will be happy to offer a no-obligation consultation at your convenience. Call David O'Connell directly at 843-455-5500, or fill out our contact form. If you are looking for Myrtle Beach real estate or homes in Pawley's Island, North Myrtle Beach or Little River, see our other websites.

Myrtle Beach Vacation Investment Can Qualify for 1031

From our recent press release...

Revenue Procedure 2008-16, which goes into effect March 10, will allow limited personal use of an investment property and will not prevent a dwelling unit from utilizing 1031 Capital Gains benefits.

Myrtle Beach, SC (PRWEB) March 3, 2008 -- A new IRS regulation goes into effect on March 10th that should give a badly needed boost to the Myrtle Beach real estate market. The rules for a tax-free 1031 exchange have been modified slightly to include limited personal use of the investment property. Most investors and buyers of Myrtle Beach condos and oceanfront houses buy their property with hopes of at least limited personal use for vacations and family beach trips. Before the new ruling, this could have disqualified them from using the purchase or sale to avoid capital gains taxes through a 1031 exchange.

The new allowance will perhaps spark a renewed investor interest in Myrtle Beach real estate, interest that has lessened somewhat due to the market slowdown after the 2005 boom. Real estate prices often doubled or even tripled on resort property during that time, but have decreased somewhat in the last year.

In recent months, the majority of the homes and Myrtle Beach condo sales have been for vacations and second homes by beach visitors. The Golf and Retirement markets such as Pawleys Island real estate were similarly affected by the slowdown.

With the new ruling, buyers can enjoy the use of the accommodations, providing the period of the taxpayer's personal use of the dwelling unit does not exceed the greater of 14 days, or 10 percent of the number of days during the 12-month period that the dwelling unit is rented at a fair market value.

The additional privileges came about due to the court case of Moore vs. Commissioner, in which the 1031 exchange was challenged by the IRS for the owner's personal use, and that "Hoping a vacation property will increase in value does not constitute an investment." Even though the Moore's lost their case, the IRS was encouraged to set down extra guidelines for limited personal use of the property, and were lenient in their gift of a "safety net" for these types of transactions.

A personal residence is still excluded from the benefits of Section 1031 of the tax code, but second and vacation homes with rental income can now qualify with the specified restrictions. This should encourage our market for golf course and oceanfront condo sales, and give investors an incentive to consider Myrtle Beach in their portfolio of 1031 tax exchange choices.

According to Section 1031 of the tax code, no gain or loss is recognized on the exchange of property held for productive use in a trade or business, or for investment, if the property is exchanged solely for property of like kind that is to be held either for productive use in a trade or business or for investment.

About Myrtle Beach Condo Store:
For more information on Myrtle Beach area real estate purchases, visit the Myrtle Beach Condo Store websites or have an agent contact you for a no-obligation evaluation of your needs and vacation home dreams.

Affiliated with Keller Williams in Myrtle Beach, they are experts in vacation property along the Grand Strand, including Little River, Myrtle Beach, Pawleys Island, Litchfield, and Conway, SC.

If interested in 1031 Exchange information, contact David O'Connell directly at 843-455-5500. David specializes in Myrtle Beach commercial real estate and 1031 transactions.

The Myrtle Beach Condo Store
2002 Oak St., Suite. 300
Myrtle Beach, SC 29577
877-839-0005
www.myrtlebeachcondostore.com
www.myrtlebeachcondos.net
www.1031commercial.com

1031 Exchange Information

Welcome to our 1031 News Blog! We will be posting articles and news from many sources to help you with your ideas and decisions for making assets from liabilities with a 1031 exchange!