A report released by the ratings service Moody’s states that commercial real estate values have dipped approximately 21% since it’s high in October of 2007. The report sent bank stocks tumbling as worries over future losses continue to plague the banking sector.
While commercial real estate has fared better than it’s residential counterpart thus far, the ongoing recession is clearly having a major impact. We’re seeing a big drop in commercial real estate activity across the entire country and the outlook is for further declines as the year moves forward.
Obviously this is more bad news for banks as well as for the government, which has already spent over a trillion dollars trying to fix the banking system. This will definitely hamper efforts to get private investment back into the mortgage backed securities market.
Even if the housing market has finally turned the corner which some people believe, if the commercial markets declines for any appreciable amount of time, it’s clearly going to delay the time frame for an economic recovery. Many investors can’t wait for the chance to jump back into the market, I’m sure many of them are getting tired of settling for lackluster returns in Treasury securities but this just adds more uncertainty into the mix once again.
Some analysts are already critical of the government’s stress test on the nation’s largest banks and many of them feel that banks are underestimating the potential of their future losses and this report just adds fuel to the fire.
Source: banks.com.
Свежие комментарии