What's In and What's Out for 1998

LOWER CAPITAL GAINS taxes on real estate are in. Treasury bill rates above six percent are out, bringing mortgage rates below eight percent in. Unemployment below five percent also is in.

In New England, following nearly a decade's recess, speculative building is back in. During this time, the minicomputer industry went out, and the mutual and pension fund industry came in. Primarily as a result of the mutual fund industry coming in, rising office rents are back in. Nonetheless, private ownership of these office buildings is out, while REIT and institutional ownership are in. Additionally, with a continually aging population, assisted living facilities remain in.

Continuing a long-term trend, big is in. Bigger department stores, supermarkets, malls, and specialty (super)stores are in. Moreover, bigger bank, accounting firm, and real estate firm consolidations are in. The only exception to this trend is with electrical generation facilities, where divestiture and deregulation are in. Still, not all utilities are breaking up. This is evident with the Bell Atlantic/NYNEX merger where the "big is in" trend continues. And along these lines (or should I say without these lines), cellular phone communication towers also are being put in (everywhere).

For appraisers and brokers, digital photography and color photo printing are in; trips to the photomat are out. Moreover, for those of us who can't type very quickly or accurately, continuous (natural) speech, voice-recognition software is in. Two inexpensive products for PC users that are in are IBM's "ViaVoice" and Dragon's "Naturally Speaking". Nevertheless, as result of the intensive memory requirements of these technologies, eight and 16 megabytes of RAM are out, while 32, 64, and more megabytes of RAM are in.

On-line, appraiser discussion groups, like the AIForum, are in. Moreover, on-line real estate appraisal education by the Appraisal Institute is coming in, yet what was to be the premier computerized data base of national commercial real estate data, Teleres, is out. Still, speedy cable modems are in while 14.4 modems are out. In addition, for appraisal of mainstream real estate properties, automated valuation models are in, while more labor intensive and expensive, manually crafted appraisal reports appear to be on the way out.

Steve
Stephen Traub, ASA
Publisher, PVM ^SM

The author, Stephen Traub, ASA, is Chief Commercial Appraiser for Property Valuation Advisors, Newburyport, MA. He is a certified general appraiser in NH, ME and MA. He can be reached at 978-462-4347 or:
by e-mail: straub@shore.net