March 29, 2009
– Comments (4)
Looks like the commerical real estate crisis is in full swing.
What an estimate, as many as 700 bank failures from it. I think this year bank failures is around 20 so far.
I'm not as negative on real estate as I was a year ago, but I think people are still underestimating the cascade effects of this real estate meltdown.
D. Wot, how bad do you think this will affect construction loans? I'd make broad guess of at least another 30% loss in value across the board. I'd like to know your opinion, or if you've read any information about this since it's another significant portion of the balance sheets of the entire industry.
Some information/projections in this 3/27 piece:
“The contrast to the boom years of 2006 and 2007 could not be more stark: whereas CMBS loans accounted for 41% of net inflows to the commercial mortgage market during 2006 and 2007, they are now accounting for net outflows from the market,” Anderson says.
AnomaLee, construction is over built in many places. We have more retail then what is needed, more offices then what are needed, more houses then what are need and so on.
Seriously, we don't need loans for things that are already overbuilt...
I think this will work out to be a case of not being able to get a loan works out to save you from yourself in some cases. Obviously there are some places that do have construction needs but there are far, far, far more places that are over built.
good quote slbutton.
dwot.. any opinion on KIM?