October 2009

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Banks' credit shock: Part II

Submitted by jbonica on Wed, 10/21/2009 - 16:35

Bubblenomics

Biz lending tumbles as commercial loans sour at alarming clip

By Aaron Elstein

At last, banking's long subprime-mortgage nightmare is coming to an end. But by no means are J.P. Morgan Chase, Citigroup, Bank of America and a host of smaller financial players out of the woods yet.

Commercial real estate is expected to lag as economy recovers

Submitted by jbonica on Wed, 10/21/2009 - 16:31

Bubblenomics

By Michelle Jarboe, The Plain Dealer

CLEVELAND -- As the economy makes the long, slow climb to recovery, the lagging commercial real estate market will tug against progress each step of the way.

Job losses, store closings and corporate cost-cutting have put office buildings, shopping centers, hotels and apartments in a bind.

Local commercial real estate sales drop

Submitted by jbonica on Wed, 10/21/2009 - 16:26

Bubblenomics

Available space has doubled in Loveland, Fort Collins since 2007

By Shelley Widhalm

Realtors in Loveland and Fort Collins do not foresee a commercial real estate bust, but they also don’t expect sales volumes to return to prerecession levels anytime soon.
“We are definitely in a decline,” said Pete Cowdin, broker and owner of Re/Max Action Brokers in Loveland.

“Everyone is expecting things to get worse before they get better,” Cowdin said. “We’re anticipating that it will be the next year or two before we see any signs of recovery.”

Sales, both locally and

FDIC Failed to Limit Commercial Real-Estate Loans

Submitted by jbonica on Wed, 10/21/2009 - 16:04

Bubblenomics

By Alison Vekshin

Oct. 19 (Bloomberg) -- The Federal Deposit Insurance Corp. failed to enforce its own guidelines to rein in excessive commercial real estate lending by at least 20 banks that later collapsed, reports by the agency’s watchdog show.

Commercial Real Estate Debt Jumps Amid Soaring Delinquencies

Submitted by jbonica on Wed, 10/21/2009 - 15:26

Bubblenomics

By Sarah Mulholland

Oct. 19 (Bloomberg) -- Yields on bonds backed by hotel, shopping-center and skyscraper loans narrowed relative to benchmarks as U.S. programs help drive demand even as late payments soar on the underlying commercial real estate debt, according to Barclays Capital.

The gap, or spread, on top-ranked commercial-mortgage backed securities tightened 0.15 percentage point relative to benchmark swap rates to 6.25 percentage points for the week ended Oct. 15, Barclays data show. That compares with 10.15 percentage points in March, according to Barclays.

U.S. Commercial Property Values Fall 3% in August

Submitted by jbonica on Wed, 10/21/2009 - 15:23

Bubblenomics

Commercial property values in the U.S. declined in August as job losses and the recession cut demand for offices, retail space and rental apartments.

The Moody’s/REAL Commercial Property Price Indices fell 3 percent in August from July, bringing the market’s decline to almost 41 percent since its peak in October 2007, Moody’s Investors Service said in a statement today. Prices fell 8 percent in both April and May, according to Moody’s.

Residential real estate sales continue to slog along

Submitted by jbonica on Tue, 10/20/2009 - 14:14

Bubblenomics

By Joe Pangburn

There were no significant shifts in residential real estate sales in September as pending contracts rose more than 4.5 percent from August but the number of new listings increase nearly 3 percent.

The Tucson Association of Realtors Multiple Listing Service data had 1,333 pending contracts for the month, up from 1,274 in August but up 60 percent from 836 in September 2008.

Hawaii Hotels Face Fewer Visitors, More Debt

Submitted by jbonica on Tue, 10/20/2009 - 14:04

Bubblenomics

For the hotel industry in the continental U.S., this downturn is the worst since the Great Depression. But the Hawaiian resort industry is taking a beating that's even more severe.

Philips CFO has yet to see commercial real-estate upturn

Submitted by jbonica on Mon, 10/19/2009 - 17:12

Bubblenomics

By Steve Goldstein, MarketWatch
LONDON (MarketWatch) -- The chief financial officer of Philips Electronics said he hasn't seen any signs of an improvement in the commercial real-estate market.

"We don't really have any visibility here," said Pierre-Jean Sivignon in an interview with MarketWatch after the group's third-quarter results. "Earlier in the quarter there was a little rise in the architect's billing index, but that proved to be a false alarm."

The Next Real Estate Shoe to Drop

Submitted by jbonica on Mon, 10/19/2009 - 17:03

Bubblenomics

Falling prices and rising delinquency rates on loans — sounds like we’re about to talk about home mortgages and residential real estate, right? Wrong. The area to watch now is commercial real estate where falling prices and rising delinquencies are the story that many banks are trying to keep under wraps. See these two eye-opening charts from Bob Prechter’s recent Elliott Wave Theorist, in which he discusses why this trend of commercial loans going bad is only just beginning.

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Excerpted from The Elliott Wave Theorist, by Robert Prechter, published September 15, 2009

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