| |
 |
|
| Science Forum Index » Economy Forum » deflation, its demand driven, demand is driven by... |
|
Page 1 of 1 |
|
| Author |
Message |
| Nickname unavailable... |
 Posted: Thu Nov 05, 2009 6:37 pm |
|
|
|
Guest
|
deflation, its demand driven, demand is driven by wages:U.S.
Commercial Property Loans Fall 54%, Bankers Say, Lenders are reluctant
to extend credit as property values fall and unemployment rises
http://www.bloomberg.com/apps/news?pid=20601110&sid=an_OclpZ0iwk
U.S. Commercial Property Loans Fall 54%, Bankers Say (Update1)
By Brian Louis
Nov. 5 (Bloomberg) -- U.S. mortgage lending for commercial property
fell 54 percent in the third quarter from a year earlier, led by a
decline in loans for malls and shopping centers, the Mortgage Bankers
Association said.
The dollar value of loans dropped 56 percent for office properties and
40 percent for apartment buildings, the Washington-based Mortgage
Bankers said in a statement today. Loans for malls and shopping
centers fell 62 percent and hotel loans declined 46 percent.
The credit crisis has driven $138 billion worth of U.S. commercial
properties into default, foreclosure or debt restructuring, according
to New York-based Real Capital Analytics Inc. Lenders are reluctant to
extend credit as property values fall and unemployment rises.
Commercial real estate prices have plunged almost 41 percent since
October 2007, the Moody’s/REAL Commercial Property Price Indices show.
“Tight credit conditions coupled with scant demand for new loans meant
that commercial and multi-family mortgage originations remained low,”
Jamie Woodwell, the MBA’s vice president of commercial real estate
research, said in the statement.
The rate of defaults and late payments on property loans sold as
commercial mortgage-backed securities jumped more than fivefold in the
third quarter, to 4.52 percent from 0.8 percent a year earlier,
according to Reis Inc., a New York-based real estate research firm.
About $26.6 billion of CMBS loans were 60 days or more past due.
Rising Unemployment
The Labor Department will report tomorrow that the unemployment rate
rose to 9.9 percent in October from 9.8 percent the previous month, as
companies cut another 175,000 jobs, according to the median
projections from Bloomberg News surveys of economists.
“Businesses are still cutting back on fixed investment and staffing,
though at a slower pace,” the Federal Open Market Committee said in a
statement yesterday. The panel restated its plan to keep interest
rates “exceptionally low” for “an extended period.”
Job cuts lower demand for office space as employers house fewer
workers and rising unemployment has helped drive the nation’s
apartment vacancy rate to a 23-year high. Both make it harder for
landlords to pay their bills.
The Fed kept its benchmark overnight lending rate at between zero and
0.25 percent, where it has been since December.
“Household spending appears to be expanding, but remains constrained
by ongoing job losses, sluggish income growth, lower housing wealth
and tight credit,” the FOMC said after meeting in Washington.
To contact the reporter on this story: Brian Louis in Chicago at
blouis1 at (no spam) bloomberg.net.
Last Updated: November 5, 2009 11:23 EST |
|
|
| Back to top |
|
|
|
|
|
All times are GMT - 5 Hours
The time now is Sat Nov 21, 2009 10:28 am
|
|