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Commercial Real Estate: Here’s What Elliott Waves Signal

“Long term problems for cities everywhere are likely”

by Bob Stokes
Updated: October 25, 2022

Skyscrapers! Elevators with smartly dressed people zooming to the umpteenth floor to take their places in smartly appointed offices.

All that glitz of commercial real estate generally comes with a very high price tag.

However, after the pandemic-induced crash and the swift post-pandemic recovery, there are indications that those price tags are again headed for markdowns.

For one thing, the work-at-home trend which kicked off in a big way during the pandemic has not done commercial property developers and investors any favors.

This is a conclusion from a joint study by Columbia University and New York University:

"[R]emote work will cut 28%, or $456 billion from the value of offices across the U.S."

Bloomberg says about 10% of that will be in New York City.

It would not be surprising if commercial property values tumbled even further than the joint study projects -- as a years-long Elliott wave pattern indeed suggests.

Here's a chart and commentary from our October Elliott Wave Financial Forecast:

GreenStreetCommercial

The Green Street Commercial Property Price Index peaked in May and declined in each of the last four months, as shown on this chart. The five-wave form of the rise from 1998 suggests a larger and longer decline, as do new workplace arrangements... Long term problems for cities everywhere are likely as most cities plan to deal with the excess by converting office space to residential housing.

And, speaking of residential real estate, these headlines give you a good idea of what's going on:

  • US housing market in 'free fall' as builder confidence suffers 'disastrous' drop (New York Post, Oct. 18)
  • U.S. housing market to see the second-biggest home price decline since the Great Depression (Fortune, Oct. 3)
  • Home prices decelerating by record amount (Bankrate, Sept. 28)

Also, home purchase cancellations have jumped in the past few months.

Keep in mind this quote from Robert Prechter's Last Chance to Conquer the Crash:

The next wave down in real estate prices will be even deeper and more prolonged than that of 2006-2012.

Get our detailed forecast for major U.S. financial markets, as well as the economy, by following the link below.

Yes, Today’s Bear Market Does Have a “Comparable Precedent”

The just-published October Elliott Wave Theorist -- part of our flagship Financial Forecast Service -- goes into detail about this precedent.

As the new Theorist notes:

"The durations of the opening waves of this bear market have matched those in the early months of..."

The Theorist goes on to mention that "comparable" bear market, describes the similarity and adds:

"The timing of this scenario would be quite devious."

Read the new Theorist's complete analysis -- plus, get our near-, intermediate and long-term forecast for the U.S. stock market by following the link below.

Financial Forecast Service

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All month long, Financial Forecast Service helps you stay ahead of the waves in the U.S. markets on the timeframes that matter the most. FFS covers the stock indexes, bonds, gold, silver, the U.S. dollar, as well as market psychology and cultural trends. It is our most popular service.

Comprises the monthly Elliott Wave Financial Forecast, 3x-per-week Short Term Update and at least 12x-per-year Elliott Wave Theorist.

The Treasury Bond: We Forecast the Turn From a 12-Year Low (plus what followed)

October 2022 saw a huge turn in Treasury Bonds. The turbulence since then includes the banking sector crisis. See our forecast on the day of this pivotal juncture -- plus what exactly what our Short Term Update has said in the time since.

Wheat Had the Ultimate Bullish Boost – War! So Why Did It Go Bust Instead?

When Russia invaded Ukraine, news stories said "no end in sight" to the spike in wheat prices. Yet prices soon went bust. Why? See the contrary chart and commentary we showed Commodity Pro Service subscribers.

EXCLUSIVE

PTPC: The Stock Market is Riskier Than Economists Realized

Everyone knows financial markets are risky. But just how risky are they? Economists thought they knew, but it turns out that they had underestimated market risk by several orders of magnitude. Discover why and learn about a perspective that can help you get a better grasp on risks in the markets and everyday life.