Is NOW the best time to invest in Commercial Real Estate?
Answering the question with YES or NO would not be enough.

But I’ll answer it in such a way that you would know when will be the right time to invest in real estate.

This could be the right time to invest when everyone is afraid brought about by the pandemic. A market downturn presents a prime opportunity to do this. However, certain factors need to be considered before you go on a buying spree. Take note, don’t get too excited of property below market value, the market is still uncertain.

One thing to remember, is that despite its current state, the nature of the real estate market is cyclical. The golden time to invest is the moment **just at the cusp of recovery**, when the number of properties for sale begin to rise, but just before prices surge as investor resurgence drives up demand.

**How to spot the signs of recovery before investing?**  
True economic recovery is signified by the presence of certain factors, and once you identify them and learn to track their progress, the easier it will be for you to spot the moment when you should begin investing.

* **Positive change in GDP growth rate** \- The change in a nation’s GDP over time is a good indicator of economic growth. The Bureau noted that the drop in the quarter’s real GDP reflects the response to the spread of COVID-19 and the government’s stay-at-home order in March 2020, In the previous quarter, before the pandemic hit, real GDP was up 2.1%. Monitoring the movement of GDP will give you an idea of how the economy is doing and if a recovery is at hand.
* **Decreasing unemployment rate** \- Unemployment rate is a lagging indicator that changes in reaction to the state of economies. When an economy is healthy, there are plenty of jobs to be found. When a downturn occurs, jobs then become scarce. The employment situation reflects the current state of the economy and can be used to gauge future economic activity as it correlates with the financial state of citizens and their ability to avail of goods and services. It also shows the state of certain sectors and whether or not they are expanding or downsizing in reaction to market conditions.
* **Uptick in consumer spending -** Consumer spending is a driving force in the economy and an important indicator of consumer demand and economic performance. It is also the largest component of GDP. Consumer spending is crucial for businesses because patronage drives revenues and when businesses perform well, they may eventually expand and hire more workers and introduce more products and/or services. Among the factors that drive consumer spending are consumer confidence and the ease or difficulty with which money can be borrowed from financial institutions.
* **State of bank lending -** Funding is necessary for businesses to expand and grow. It is also needed for individuals to procure goods and services. The Federal Reserve’s April 2020 loan officer opinion survey on bank lending found that during the first quarter of the year, banks tightened their loan standards across the board in response to the pandemic and its ensuing economic repercussions. **Banks also tightened their standards for household loans “across all three consumer loan categories – credit card loans, auto loans, and other consumer loans… while a moderate fractions of banks tightened their lending standards on most categories of residential real estate loans.”**  
In written comments on the Fed survey, banks said the changes in standards and demand across loan categories in the first quarter occurred in March, as the economic outlook shifted due to the pandemic. Things will take a turn again once an improved economic outlook heralds more robust bank lending.
* **Rise of freight transport** \- Freight transport is considered to be the primary component of the supply chain. It pertains to the transport of goods and commodities via road, rail, air or sea. The country’s highly developed transportation system plays an important part in economic growth and connectivity. However, due to restrictions set in place in response to the pandemic, the movement of goods and commodities from country to country and across state lines have tapered, or in some cases, been stalled altogether.

Real estate prices tend to depend on the state of the economy. Certain indicators are already showing positive dynamics and if they continue going upwards, it may give us enough confidence to update our investment outlook. It is a good idea to keep track of market movements in the upcoming months and start researching markets and properties for investment.
[{"id": "gw6a1bm", "text": "There may be a few specific markets (sub sectors, regions) that sufficiently declined over the past year to argue that they could now be on the way up and \"on the cusp of recovery\". Hotels, definitely. I saw Columbia Sussex took an absolute beating on a distressed sale in the Denver Tech Center, for example. \n\nMost everything I looked at 2H20 and 1Q21 did not decline, so I wouldn't say most things could meet your threshold for the golden time. That said, we appear to be entering an inflationary phase with explosive spending worldwide. So there may be another massive upswing in front of us despite not seeing the decline of a traditional economic cycle.\n\nObviously idk, if I did I'd have a lot more money. Personally I'm trying to position by staying invested, minimal cash on hand (beyond reserves) to protect against inflation, while not taking on much new leverage in case things crash in a couple of years.", "replies": [], "depth": 1}, {"id": "gw6mfww", "text": "Wait another 6 to 10 months. Then invest and you are likely to get some bargains.", "replies": [], "depth": 1}, {"id": "gw7flj0", "text": "\"Real estate prices tend to depend on the state of the economy \"\n\nReally?", "replies": [], "depth": 1}]