I'm renting a house now, and I've been shopping around for a store/office space for a few months now.
And, yes, prices are being held unnaturally high. If they weren't, I would expect to see far fewer empty storefronts than I do now -- and I've recently seen this not just in my local small town, but also in Sacramento, in the Bay Area, and even in Seattle.
Locally, I know for a fact that there are a number of property owners that would prefer to have their space sit empty rather than rent it out for the amounts that people are willing to pay right now. I've talked to them.
Housing is not that much different, except that at the moment there is higher-than-usual demand for rental properties, so the "market forces" are driving the prices upward. Still, unless you are a property owner who foolishly can't afford to let a building sit vacant, you can get away with charging higher rent than other people are for similar properties.
I agree with the person here saying that these effects are due to information asymmetry. As a prospective renter -- either for commercial or for housing space -- in order to find the best possible deal, I must invest a lot of time contacting numerous people, reviewing various Google Maps mashups, reviewing classifieds, and wandering around town. As a landlord, to set a price I simply have to take a quick glance at what nearby properties are going for, add a little bit to that amount, and then wait.
Eventually, a prospective renter will come along, because they don't know where the better deal is.
And, yes, prices are being held unnaturally high. If they weren't, I would expect to see far fewer empty storefronts than I do now -- and I've recently seen this not just in my local small town, but also in Sacramento, in the Bay Area, and even in Seattle.
Locally, I know for a fact that there are a number of property owners that would prefer to have their space sit empty rather than rent it out for the amounts that people are willing to pay right now. I've talked to them.
Housing is not that much different, except that at the moment there is higher-than-usual demand for rental properties, so the "market forces" are driving the prices upward. Still, unless you are a property owner who foolishly can't afford to let a building sit vacant, you can get away with charging higher rent than other people are for similar properties.
I agree with the person here saying that these effects are due to information asymmetry. As a prospective renter -- either for commercial or for housing space -- in order to find the best possible deal, I must invest a lot of time contacting numerous people, reviewing various Google Maps mashups, reviewing classifieds, and wandering around town. As a landlord, to set a price I simply have to take a quick glance at what nearby properties are going for, add a little bit to that amount, and then wait.
Eventually, a prospective renter will come along, because they don't know where the better deal is.