Fed shows strong concern about commercial real estate crisis

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Following a recent meeting, the Fed board seems to lose hope regarding regarding real estate crisis.

They believe that US economic recovery will not happen until Q3 or Q4 2009 after economic stimulus package show its first effects. Before that, crisis will continue: credit crunch, economic downturn.

From that perspective, they believe that recovery will be weak and it will take longer.

Regarding residential housing, they indicated that no indication showed that residential housing was about to stabilize in 2009.

Overall, people fear that real estate defaults would go up and would force people to sell their own properties.

Hopefully, things will get better in the near future…

Real Estate continue to decline

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Lack of credit and the economic downturn will continue to depress the real estate market in 2009 following a forecast published by the National Association of Realtors®.

Economists also said that all components of market declined: lack of commercial credit, no liquidity in the market, economic downturn and no opportunity to sell assets.

In Q4 2008, The Commercial Leading Indicator for Brokerage Activity fell 6.0 percent to an index of 109.2 from 116.1 in Q3 2008, and is 9.1 percent lower from 120.1 in Q4 2007.

These are not good news for the US real estate market…