In this video Jeremy Cyrier from MANSARD will be giving an update on the year-end numbers for 2022 for office, retail, flex and industrial sales in the greater Boston area.
MANSARD has pulled together all of the trades that happened in Rockingham, Essex, and Middlesex Counties, valued between $1M and $100M in 2022. In this video Jeremy is going to show you some data, charts, and market cycle trend information. We hope you enjoy it, and if you do, please give us a thumbs up, subscribe to our channel.
“This is our year-end review of 2022 looking at the market for Rockingham, Essex and Middlesex Counties. So we’re really focused on greater Boston sales trends, commercial sales trends. This is identifying the office, industrial and retail markets valued between $1M and $100M. So when we look at the market, what we like to do is look at it in a perspective historically, and we track data going back to 2006, so we can see the market cycle year-by-year for sales volume by buildings traded. And what this gives us a sense of is the relative stage of the market and how active it is. And as you can see here, we had a peak year in 2021 with 829 sales really dwarfing all of the prior years going back to 2006, even 2022 ended up as a very strong year with a long-term average at 455 sales per year. So what we saw in 2022 was about 707 trades, which is still quite strong. Looking at our year-over-year effective change in year-to-date sales, we can see the slowdown in the market, namely the transition here that looks somewhat like this downward trend in the 2007 Great Recession into 2008, just the scale of the velocity of slowdown. Now, not as deep an effective change. As you can see, we ended 2022 with a 21% year-over-year change. And that is a strong change in velocity, but not anywhere as grave or dire as we saw back in 2007, 2008, when transaction of volume plummeted severely. The 10 Year Treasury been very popular in the news. If you’re reading financial news, you’re seeing the constant references to the yield of the 10 Year Treasury. Looking at it historically, you can see we did bottom out in 2020 with an average yield that was phenomenally low, just around that 1% mark. We ended 2022 with a 10 Year Treasury at about 3.5%. Because we started the year at the lower end of the range, our average yield for the year came in on the chart just below 3%. But what’s interesting is looking at the annual percentage change, you can see here that the dramatic increase in the 10 Year Treasury by the Federal Reserve shows just this very sharp up into the right trajectory of change. And it does make me wonder how much further this is really going to go. There’s chatter about a rate increase here in early 2023, but wondering, and I’m thinking maybe this is going to start to taper. And if you look at this percentage change, you’ll see that the interest rate policy going back to 1990, an annual percentage change, does tend to fluctuate. We’re accustomed to changes in the last 10 years, but it’s interesting here that we’ve seen such rapid change. Will we see this level off? Will we see it start to come down? When will it start to come down? We’re not really sure. Looking at sales volume in relation to the prior years, again, that annual transaction velocity from 2006 to 2022, 455 deals per year of trading hands on average. It’s about $2.7B annually that we see in the market. Last year, 2022, we saw 707 transactions and $4.7B in volume. Now granted, there’s some appreciation in that number, but looking at the sales volume in the market, we can see here that we are still very busy. The question is, when did the market start to decelerate? And when we look at 2021 in relation to 2022 and we start plotting these Fed rate hikes in 2022, we see here that the market really didn’t start to respond until about October, November, and December where we saw a tapering of sales happening. And so it was really the shock of those May, June and July rates hitting the market that we started to see the deals closing in October, November, December, reflecting the changing environment. So we’re expecting to see that continue into 2023. I would be surprised if we had another 707 unit sale this year. My expectation is we’re going to trend down more toward the long-term average this year in volume…”
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