Roanoke city real estate made a rebound. What now?
The city of Roanoke’s real estate values increased by 4.74% last year, the biggest property value increase for the Star City since 2007. Commercial properties’ assessed value jumped by 4.55%.
But with the U.S. stock market plummeting to 1987 record lows in March as the coronavirus pandemic disrupted life across the nation, many in the commercial real estate industry are trying to figure out what’s next.
“In terms of what could happen, anybody could guess. It’s too early to say,” says Frank Martin, senior associate broker with Hall Associates, a commercial firm in Roanoke. “Closings and leasings are still happening. Nobody is stopping them now.”
Brokers are “nurturing their deals they have in the pipeline, staying in touch with people,” Martin adds. “The smart ones I know are trying to get a handle on how it will shake out. In commercial, you can’t just wait to see what happens.”
“It’s too early to know what all of the impacts will be,” says Matt Huff, president at Poe & Cronk Real Estate Group, another commercial real estate agency in Roanoke. “I will say that I think it has been helpful that other countries are coming out of this, like China, so we can see around the curve.” Huff expects to have plenty of work over the next 60 to 90 days because of the industry’s long time between starting and finishing projects.
As of mid-March, he notes, the construction supply chain was holding up, and construction managers were figuring out how to keep their employees working while maintaining social distancing.
In the first quarter of 2020, Roanoke’s commercial real estate outlook was rosy.
New construction in the city increased by more than 1% for fiscal year 2019-2020, the first such increase since 2010, Susan Lower, the city’s director of real estate valuation, told City Council in January. The average annual wage for construction workers in the third quarter of 2019 in the Roanoke metropolitan area was $46,864, according to JobsEQ/Chmura Economics & Analytics. Ten years ago, the average wage was $35,440.
Huff and Martin say the outlook in Roanoke has changed from even a few weeks ago, but they’re hopeful that the industry will not see the cataclysmic disruption happening now at restaurants and small retail businesses.
“The best thing we can do is advise,” Huff says, noting that a lot of his customers are calling him for recommendations. After all, adds Martin, “in the commercial world, we’re used to assessing risk all the time.”