SANITY WILL PREVAIL

Real Estate Watch:

October 7 – Wall Street Journal (Lingling Wei and Maurice Tamman):  “Banks in the U.S. ‘are slow’ to take losses on their commercial real-estate loans being battered by slumping property values and rental payments, according to a Federal Reserve presentation… The remarks suggest that banking regulators are girding for a rerun of the housing-related losses now slamming thousands of banks that failed to set aside enough capital during the boom to cushion themselves when the bubble burst. ‘Banks will be slow to recognize the severity of the loss -- just as they were in residential,’ according to the Fed…”

October 8 – Bloomberg (Daniel Taub):  “U.S. home sellers cut their asking prices by a total of $28.4 billion… Trulia Inc. said.   The average discount was 10% as of Oct. 1… Homes listed for more than $2 million were cut the most, with owners taking an average of 14% off the original price. Luxury homes accounted for 25% of all of the reductions.” 

October 8 – Bloomberg (Daniel Taub):  “Vacancies at U.S. shopping centers rose in the third quarter to a 17-year high as unemployment climbed, consumers cut spending and stores closed…Reis Inc. said.  Vacancies at neighborhood and community shopping centers increased to 10.3%, the highest level since 1992, from 8.4% a year earlier…” 

October 7 – Wall Street Journal (Christina S.N. Lewis):  “Rent for office space is falling at the fastest pace in more than a decade as vacancies create a glut and landlords slash prices to attract tenants. Nationwide, effective office rents fell 8.5% in the third quarter compared with the same period a year ago… according to Reis Inc…” 

October 6 – Bloomberg (Hui-yong Yu):  “U.S. apartment vacancies rose to 7.8% in the third quarter, the highest since 1986… Reis Inc. said.  Actual rents paid by tenants, known as effective rents, declined 2.7% from a year earlier… Asking rents, or what landlords sought, fell 1.8% from a year earlier.”