Developers, who had focused on constructing condominiums and single-family homes, have shifted their focus to the multifamily sector, with the cool down in residential real estate. As a result, Reis Inc. expects the national inventory of apartment rental units to climb by 94,700 this year, the highest level since 2004. Those additions, coupled with added supply coming from units that had been slated for condominiums but have become rentals, should result in an increase in vacancies to 6.2% in the second half of 2007 from 5.8% in the first half of the year. Additionally, condo conversions have just about stopped as the country has a nine-month supply of condo units up for sale - that's a greater supply than single-family homes.
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Roughly $1.3 billion of commercial mortgages and loans are being offered through the secondary loan-sales market, a nearly unheard of volume for the sector. Some say the recent capital markets crunch has motivated lenders to speed up their scheduled efforts to clean up, or re-balance, their balance sheets. In addition, bank lenders have become ever-more wary of their commercial real estate exposure, given the warnings that regulators have made in recent months. Some banks are now realizing that some of the land development loans and condo conversion loans will not likely be turned around anytime soon, given market conditions. So they're essentially cutting bait and selling.
RealEstate JacksonvilleFlorida
Thursday, August 23, 2007
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