Ebb & Flow in Europe

Ebb & Flow in Europe
The western European Countries seem to be catching the cold from the USA. Germany may even be heading for recession. Eastern countries are still rocking and rolling for the most part. They are growing based on internal demand. This is caused by rising wages. The rising wages are causing inflation. The inflation may kill the goose that laid the golden egg.

There is still a lot of unsatisfied demand for real estate by users in Romania and Bulgaria. The slump in western markets is driving investors and developers east. Investment and development are normally good things for a real estate market. Too much development leads to oversupply and eventually causes a “market correction”. Over enthusiastic investment becomes speculation and eventually causes a “bubble”.
Signs to watch: For oversupply compare absorption rates with permitted projects. Look at vacancy rates. Industrial space is the steadiest market. This brings core jobs and growth. The office market is usually the first to falter and the last to recover. Retail follows closely behind. Looking at a country as a whole will give an imperfect picture, look first at the smallest submarkets. The small submarkets around them will give an indication of market direction. For oversupply and speculation awareness one always should ask. Who will use this property and how rather than who will buy this property.



David Segrest is a REALTOR in Charlotte NC. His website is http://www.segrestrealty.com His email is david@segrestrealty.com