US commercial real estate market in need of oxygen

Economic recessions are nothing new in the United States of America. They did happen at several times in the past and as a part of global fallout. Well, these are all inseparable parts of the free market economy and will continue to happen. But a moment comes, rarely in history, when devastations surpass the past records. According to many economists, the ravagings of the ongoing recession is greater than the Great Depression of 1929. Well, this may make the common people confused since the consequences happen to be almost same. Now, what makes me use the word “almost”? I am using this word sensibly since a difference is being witnessed.

In the earlier ages the depressions failed to squeeze the spirit of investors and agents. All seemed to be bouncing and were willing to face the eventuality no matter what. But at this time the mood is just the opposite and if the attitude of the real estate industry is taken into consideration, it will appear to be bombarded. All these indicate that the situation is really in bad shape and the worst affected has been the U.S. commercial real estate market due to the global credit crunch. Is there any hope of early revival? If we follow the wise sermons of the U.S. National Association of Realtors, the decline will continue into the next year also and at the same momentum.

What will be the other side effects therefore? According to the considerations of the organization, it is expected that the rates of vacancies will increase in the offices along with in retail and industrial sectors into the third quarter of next year. However vacancies among multi-family units are expected to remain flat.

Speaking on this Lawrence Yun, chief economist of NAR said while encouraging U.S. policy-makers to step in to help, “Although access to residential mortgages has improved, the opposite is true for commercial loans. We need liquidity for commercial mortgage-backed securities not only to free the market, but also to rollover existing debt.”