The vacancy rate fell slightly by 20 basis points to 12.6% in the second quarter from the previous quarter, and is down 70 bps from a year ago. The slow rate of net absorption compared with the growth in office jobs is due to the shadow space from the high levels of job losses during the past recession without a corresponding loss of office demand. In short, tenants are burning off excess space that is left over from the recession, before the need to lease additional space will be realized.
All of this will hinge upon many factors and the overall economy:
- Will companies be able to, or want to, make office time and space be valuable enough/necessary in the face of the Internet and people being able to work from nearly anywhere?
- Will Ben Bernanke be able to stave off the liquidationists throughout what will be a very long recovery regardless?
- Should we as a whole society absorb private banking losses or rather still clean house and turn banking into a public utility?
- How will the US be able to create new high-paying jobs by the tens of millions considering low-wage competition in developing nations and all of this debt burden perpetuated by Ben Bernanke’s policy of near-zero interest loans to banks that the Fed then paid/pays a higher saving rate on those borrowed funds?
- Should we allow banks to sit on their REO (real estate owned) just waiting to trickle it back onto the market only after market values have been artificially raised via that sitting? Is this really a “free” market in the first place considering the Fed’s policies and practices of propping up those very banks?
- What’s best for the vast majority of people and our economy as a whole?
- Wouldn’t doing what’s best for that vast majority be best for those with the most now anyway? Didn’t Henry Ford pay his workers enough to be able to buy the cars they turned out? Wasn’t that the smart economic/financial decision on his part? Shouldn’t we be doing that now rather than running the middle class and lower classes down even further forcing them to work off the debts created by the deregulated, hyper-leveraged, toxic-securities Wall Street firms that flooded the mortgage market with cash and long before Fannie or Freddie ever got into the sub-prime and exotic securitization rackets?