Sunday, October 04, 2009

The Internet and collapsing real estate values

Web Ad Sales In Britain Overtake TV

Watch for the coming crash in commercial real estate, as increasingly, intangibles, non-perishables and some perishables get sold by Net and delivered from centralised locations.


Tyrone said...

I've given this subject some thought. What I have questioned are the long-term effects of internet commerce. In the short-term, consumers benefit because they obtain what I alway say is, "the best price on the planet." Quite often, state taxes are not included and with free shipping it becomes very attractive.

In the long-term, however, does this displace jobs, increase unemployment, reduce tax revenues, and ultimately drive prices up higher?

Perhaps we can expect tighter regulation of internet commerce in the future.

Sackerson said...

Interesting point. Perhaps it'll drive up taxes generally, but the effect on profit margins will be worse on non-internet business.

Mark Wadsworth said...

Overall this will have little impact on land values.

Whether a factory or a warehouse deliver to a physical retail outlet or direct to the consumer is neither here nor there.

If people save a few bob by ordering online then they will spend more on something else, i.e. they will go to town for a coffee and cake or a drink or to the pictures instead of going shopping.

Taken to the logical conclusion, internet shopping makes the economy work ever so slightly more efficiently, and as Ricardo's law of rent says, all efficiency gains flow through to higher land/location values (i.e. residential and business land values are higher where you get broadband, for example).

Sackerson said...

Hi Mark and thanks for the visit.

What if they need to save a few bob because there's less money overall? Did you watch tonight's Dispatches programme about the British pensions system?

Paddington said...

'Nothing but shoe shops' comes to mind. Our family, due to allergies, has to do a lot of food shopping online. That, and the fact that the nearest grocery is about 5 miles.

Laguna Beach Realty said...

Shopping is a good stress buster but it has really become difficult to deal with the real estate stress and I think for that some other remedy need to be sorted out.