Prime real estate plagued by vacancy
The building has been empty for years. Now the windows are boarded up, the facade is peeling and the neighbors are talking.The polite term for this is the "Boom-and-Bust" cycle, although a more accurate description might be the "Bubble-and-Crash" cycle. We topped the bubble part in commercial property in San Francisco a couple of years ago. Now we're crawling out of the crash part.Crime, drugs, death, madness? How can something this valuable, tangible and costly fall through the economic cracks? Shouldn't there be a law against leaving a perfectly livable or usable space uninhabited year after year?
....Whether it's a forgotten warehouse, a burned-out home or a vacant storefront, unused properties languish in every big city and podunk town in America. In some areas where property is relatively cheap and the economic activity extremely slow, it's a shame, but it's also quite understandable. After all, in these places, it may be very difficult to find tenants or buyers, while the cost of keeping the property empty may be negligible.
But in the San Francisco Bay Area, where urban lots are among the most expensive in the nation, it's weird to see houses and commercial buildings just sit around like so many architectural cadavers. Unused properties still cost money: Most are mortgaged, and all have property taxes. Why would property owners keep a piece of property year in and year out that was losing them money?
Residential real estate is still going up.
Posted by The Daily Pundit at July 16, 2004 06:40 AM | TrackBack