With this latest decline, people are loosing their jobs, businesses are closing. Property values are declining, short sales are happening, and foreclosures have hit both markets. Many sources tell you that the worst is yet to come. There are significant numbers of mortgages in jeopardy.
As I'm proof reading this, I'm getting depressed. I have many friends and clients who are feeling the "pinch". But there may be some good news out there. We are hearing that the residential market may have hit bottom. Here is a press release from the National Association of Realtors that identifies some positive trends in the commercial market too. Check it out:
It says the trend of decline in the commercial real estate market is slowing. That may or may not be a long term trend. I hear talk about commercial foreclosures around the corner.
If you have read any of my blogs in the past you may be able to guess what the theme of my comments will be... (I'll try to keep it short)
The commercial market has certainly been affected by the recession. Less in the economy means less jobs which means more businesses closing which means more vacancies which means less rent which means less ability to make mortgage payment which means investment portfolios are smaller which means... you get the idea.
One tool that the residential market has has some success with is loan modification.
I see loan mods helping the commercial markets as well. Work it from the bottom up... If a landlord can get a loan mod, they can negotiate with a tenant who may be having troubles to lower their rents which may help keep the business in operations which means jobs can be saved which means more cash in the economy. I think?? Or the banks can foreclose and become landlords, or try to sell investment properties in a down soft market. Which means... for another blog.
Let me know what you think...
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