Job Loss is Ground Zero - May 2010

Property values increase and decrease based on supply and demand.  Presently the market is experiencing less demand driven by high unemployment (13%+ in Sarasota/Manatee) which translates to fewer employees to occupy buildings and fewer dollars circulating that support retailers, restaurants and other discretionary purchases.  High unemployment causes vacancies to increase, high vacancy rates encourage competition for tenants, competition for tenants lower rent which drives down property values.    Solution–create jobs and the chain reverses all the way back to higher property  values.  Economists view high unemployment  as a “lagging” economic indicator but, to commercial real estate, jobs are the foundation of a healthy market.