If you want to get the earliest forecast for the commercial real estate (CRE) market, you have to find out what the architects are doing. The Architecture Billing Index is a 9 – 12 month leading indicator of construction spending in CRE. The index increased in March to 46.1 from a rating of 44.8 in February. An index above 50 represents expansion of investment.

This is a good sign for CRE considering everyone believes it’s the next bubble to burst. My thought is: how can CRE really be that bad if architectural business is seeing an increase in activity and a recovery. The ABI might even be above 50 by the end of summer! Can you imagine how hard activity will snap back due to the depleted pipeline???

James Shilling, PHD, Depaul released a good white paper on multi-family housing trends in Cook County. This is an essential read for any real estate investor. Click the link below.

Multifamily Housing Market
and Value-at-Risk Implications for Multifamily Lending
Institute for Housing Studies
APRIL 2010
DEPAUL UNIVERSITY

Check out this video that talks about how the hot Armitage corridor has changed and is in decline:

http://link.brightcove.com/services/player/bcpid66978500001?bctid=76216779001

There might be a local shock coming to Chicago real estate after the state Senate voted 40-to-7 to lift the residency requirement for teachers in the Chicago Public Schools. Think about the implications for a second. If teachers (and their families) get the green light to move outside Chicago then you will see a lot of migration from areas like Humbolt, Avondale and Uptown to places like Elk Grove Village, Bensenville and Western Springs. These families will sell their homes in the city and landlords will find it that much more difficult to fill vacancies after the exodus (lower rent = lower prices on properties).

Think about Humbolt specifically – I’m assuming a lot of Clemente teachers live in this neighborhood that would love to get a traditional house with a yard. All they have to do is move NW off of the Kennedy to find that dream. I’m not arguing morality here, just what the impact might be.

Mayor Daley is vehemently against this idea as Chicagoans will see taxes rise and a widening of the gap between lower and upper class. The teachers union argues that it’s not fair to keep teachers in the city because housing is expensive? Really? You can rend a nice place in many neighborhoods for 600-800 dollars/month – that’s really cheap in my opinion.

ARTICLE HERE

Real Estate is still very much at the center of the economy, even with all the controversy around Obamacare. Here’s a nice summary of how RE fits into the November Elections:

“For real estate, markets desperately need an improved jobs picture to start to improve occupancies across flagging property sectors and increase consumer spending in stores. The November elections all come down to the economic track and speed of recovery. High unemployment spells trouble for real estate owners just as it does for incumbent politicians—that’s why Democrats appear especially vulnerable and real estate investors and borrowers continue to struggle through this protracted downturn and so far pseudo rebound.”

ARTICLE HERE