Commercial Real Estate the Next Economic Beatdown?

August 30th, 2009 by Scott

We are a long way from the residential real estate market being anywhere near fixed. Last week our lenders announced an increase in the minimum credit score for government backed FHA loans. One branch of the government says we will do everything possible to clean up the RE market while another makes it increasingly tougher for buyers to buy the inventory that is a clog in the RE recovery. This said we still are in the quagmire grasping for good news that would indicate a recovery. As in the old saying the light at the end of the tunnel may be a train.

Commercial RE seems to be headed for the same pit residential markets are hung in. this weekend there are two articles that bring to the forefront some problems that don’t look good for the market.

The Wall Street Journal has this article.

Commercial Real Estate Lurks as Next Potential Mortgage Crisis

Seems that the delinquency and tightening of the credit in commercial markets is steering the ship into the same storms that residential markets are in.

Yahoo Finance has this article.

Meltdown 101: Why banks’ struggles have worsened

This second round may spell disaster for more banks and financial lenders, and investors. Fear and uncertainty in the financial markets have frozen them from making moves to right the economic mess.