Cost Advantage Markets Rebounding, by Studley
As the first quarter of 2013 closed, the U.S. economy is in its third year of recovery and shows signs of gaining momentum, according to the Studley Report 1Q2013. Early leaders in the office market rebound are being replaced, according to the report. The best leasing markets in 2010 and 2011 (with the exception of Houston) were the higher-cost knowledge centers like the Bay Area of California, Manhattan, and Washington, D.C. Deal volume in many markets such as Manhattan, Washington, and Los Angeles has become more lackluster in the last few quarters. In contrast, leasing has spiked in markets like Dallas/Fort Worth, Denver, Orange County, and Tampa Bay. Those markets offer a lower cost of living, labor and real estate, noted the Studley report.
The lower-cost markets are benefitting from a potent combination of locally based growth and a steady flow of companies relocating their entire operations — or a significant portion of them — to these regions. Sunbelt markets like Phoenix, Southern California, and areas of Florida, which were the hardest hit by the housing crash during the recession, have seen the strongest rebound in housing.
This stronger demand for housing, low interest rates and steadier labor markets have also breathed life back into the mortgage industry. Further, banks and insurance companies are shifting back-office and mortgage operations to these markets in an effort to capture savings on labor, real estate and taxes as well as generous state and local incentives.
Add a Comment
We welcome your thoughtful comments. Please comply with our Community rules. All comments will display your real name.