>This article is directed at all appraisers including real estate appraisers, business appraisers, art, antique, machinery, equipment, sports memorabilia, jewelry, coin, or collectibles. An appraiser is a person who provides a defined economic exchange value opinion of the rights inherent in the ownership of some tangible or intangible property.
The Massachusetts and Rhode Island Chapter of the Appraisal Institute is hoping all of our friends and clients are continuing to stay safe during the COVID-19 Pandemic. As this is my last president’s letter I would like to thank everyone for their continued support of the Appraisal Institute and the local MA and RI Chapter.
The housing market in 2020 saw its share of ups and downs due to the onset of the COVID-19 pandemic. Changes in the real estate market were affected by the federal government’s response to counterbalance the damage done to the economy by the coronavirus and the subsequent response to policy and monetary changes by the public.
The Providence multifamily sector remains strong amidst the pandemic. In a time of “doom & gloom” the Providence market is continuing to stay afloat, even outperforming its peers in larger, more dense, urban markets. With no loss in velocity or demand, the Providence market is confident and remains on solid ground.
Prior to the start of the ongoing COVID-19 pandemic, the demand for industrial space in Rhode Island was strong, consistent with the last few years, with historically low vacancy rates - hovering around 3% in Rhode Island’s industrial market. On the sale side, in early 2020, a fully leased 30,500 s/f industrial building at 97 Dexter Rd. in East Providence, R.I. sold for $1.3 million to an out-of-state investor. Also in early 2020, on the leasing side, an international-based developer and manufacturer of high-tech medical sensors leased 10,600 s/f of industrial space at 40 Albion Rd. in Lincoln, RI.
Upon entering the 4
th quarter of 2020, which is an election year, New England real estate investors who sell investment property and desire Section 1031 tax deferral sometimes question if they “should close this year or postpone until 2021?” One of the factors to consider is that 1031 exchanges straddling two tax years may be treated as an “installment sale” under Section 453 which provides a couple of options.
The rapid uptick in residential market conditions after the COVID lockdown has generated strong demand for appraisers. Given the low interest rate environment created as a market reaction to the pandemic’s effects and some trends creating demand for detached housing and new construction, the uptick – rather a continuation of 2019 - was somewhat unexpected but not entirely unsurprising.
How did we get to October? It has been a long road adapting to the pandemic, changing our lives, and altering our work habits like never before. The good thing from all this is that we are learning to be resilient and adaptable. As we move into fall, the cities and towns are holding public meetings online and residents and presenters are learning how to be heard. It was good that prior to this shift to virtual meetings, most approval meetings had moved from bulky display boards to power point. This made moving them to the online virtual format fairly smooth.
The popular coffee shop/party/Zoom call question is, “How is the pandemic treating you?” and everyone seems to have a different answer. The entertainment and event business sectors are having a tough time right now, but some of the larger companies have pivoted or gotten creative with how they can serve their customers, though perhaps with a different scope of work.
“Bump in the Road” is unfortunately a sign that most Mainers have seen many times before. As Mainers we’re not uncomfortable with it, because we know that things in Maine rarely swing too far from our realm of comfort. Although there are certainly uncomfortable situations ahead, most likely in the office and retail markets, hopefully they are just bumps in the road and not major detours.
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