Residential Real Estate Downturn Due To Greed, Commercial Due to Credit Crunch?
Here is a question to the media.
Why is it when residential sales drop it is because of the fault of the housing industry, but when sales of commercial properties fall it is because of the credit crunch?
I know I am seriously generalizing the issue but that is how the media is approaching this.
- All residential problems are reported as based upon upon greed, subprime problems, and fraud.
- All commercial real estate problems are based upon the credit markets falling apart.
Yet both market problems were created by prices soaring too high and money that was too easily given. The dynamics are not that different but the reporting is.
Sales of US hotels are expected to fall as much as 50 per cent this year because the credit squeeze has reshaped investors’ ability to purchase real estate, says a report due for release today.
The value of hotel property sales is expected to fall to $23bn-$26bn, down from a record $45bn in 2007, as deals become more difficult, according to real estate brokers Jones Lang Lasalle. The expected slide in sales would more than undo last year’s 38 per cent rise.
“The credit crunch has halted mega-deals and many portfolio deals,” the report will say. via the Financial Times
Great points Tom - the flavor of the day solution is only adding to the instability and volatility.
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please contact me via e-mail if interested in the home listed
above.
jonieckstrom@yahoo.com 
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