Report: Commercial Real Estate to Bottom in 2010
Commercial real estate is in for some tough sledding in the short term, but it’s likely to hit bottom by the end of 2010, according to a survey of investors, developers, lenders and other industry observers.
The 2010 version of Emerging Trends in Real Estate, released by PricewaterhouseCoopers and the Urban Land Institute, predicts that commercial real estate values will decline an average of 40 percent from their peak in 2007. The survey called this fall the worst commercial decline since the Great Depression and said it would overshadow the 1990s savings-and-loan crisis.
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Voluntary foreclosures are challenging the government’s $75 billion effort to keep troubled and underwater borrowers in their homes.
About 588,000 borrowers walked away in 2008, twice the number in 2007, according to a study by credit management firm Experian and management consultants Oliver Wyman. Many more are expected to walk away, hampering the real estate recovery, economists say.
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Federal Reserve Keeping Key Interest Rates Low
The Federal Reserve announced Wednesday that it is keeping its key interest rate at or near zero and will continue to do so as long as the economy remains weak.
Analysts predicted that the Fed would leave interest rates low for at least six more months.
The Fed said that it would continue its program to buy $1.25 trillion worth of mortgage-backed securities by the end of March, a sign that it intends to continue to drive down the cost of mortgage loans.
Source: The New York Times (11/5/2009)
© Copyright National Association of REALTORS®, Reprinted from REALTOR.org with permission.
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Mortgage rates continue to attract home owners into refinancing. While undocumented we feel there is a growing sentiment that rates will quickly start climbing as economic data shows strengthening. Australia fared better that the U.S. during the downturn and the Australian central bank began raising rates a week ago to head off any inflationary trend. Our next post looks at the latest information from the Federal Reserve.
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Release Date: November 4, 2009
For immediate release
Information received since the Federal Open Market Committee met in September suggests that economic activity has continued to pick up. Conditions in financial markets were roughly unchanged, on balance, over the intermeeting period. Activity in the housing sector has increased over recent months. Household spending appears to be expanding but remains constrained by ongoing job losses, sluggish income growth, lower housing wealth, and tight credit. Businesses are still cutting back on fixed investment and staffing, though at a slower pace; they continue to make progress in bringing inventory stocks into better alignment with sales. Although economic activity is likely to remain weak for a time, the Committee anticipates that policy actions to stabilize financial markets and institutions, fiscal and monetary stimulus, and market forces will support a strengthening of economic growth and a gradual return to higher levels of resource utilization in a context of price stability.
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