The Financial Crunch Surrounds the Real housing estate U.S. Is the commercial Real Estate the Next pole to go down? The U.S real Estate Commercial Property has loomed down to about 40-45% since Year 2007. The Commercial estate Crises isat its brink; currently 18 percent of all the Offices Spaces in the whole of the U.S.Aisempty now. It is predictedby a few commercial Pundits that this Crises has just startedand The Largest Commercial Real Estate Loan losses will be during the Year 2011 and onwards. These Losses could reach to about as high as 200 to 200 billion Dollars. All Facts and Figures point towards the Parameters that the commercial Real Estate Market in USA will go down with a much faster Pace in the coming years. As the Real Capital experts have analyzed, The Set Rate For all the commercial Real estate Mortgage Held by U.S Bank Authorities has more than just increase two fold in the Last 4 months of the year 2009.It is Highly Possible that this Default Rate for the Commercial Real Estate Mortgage may reach to the highest peak of 5.4 percent by the end of Year 2011.
Nearly 3000 U.S Banks are declared to be having a Risky Concentration of Commercial Real Estate Loans. Ranging from small to mid-size banks, they have been severely weakened by the financial crises that has Surrounded them recently. It is also predictedby the Real Estate Pundits in the U.S that this Crises in the Commercial Real Estate could Also Lead to the Massive Failures among the small and Mid size Banks. So it also turns out that the banks are not responding so Less to this commercial Real Estate Nightmare. It has been acknowledged FDIC that the Number banks troubled due to the financial crunch Has Increased up to 703 from 252 in number in the year 2009. The Banks are increasing the Loan Standards and Reducing the Number of loans that they are making. The Fact that many Commercial real estate Owners are now giving up on the Properties that are no longer Valuable just like many other Residential Real estate Owners in U.S.A, has caused the Default Property Rates to increase even Further.
These Kind of Defaults has becomemore and more common now, and are expected to rise even further in the next few years. The Commercial Real Estate Properties Usually Used to carry a Mortgage of about 5 to 10 years, Most of the Loans Made between the Years 2000 to 2005 are now coming up for a roll over as the credit Standards have become more and more restricted and the Borrowers of those loans simply do not qualify for refinancing of these loans anymore. The Report, "Commercial Real Estate at the Precipice" Indicates that even after lenient lending Standards of the Banks, 57 percent Commercial Real Estate Mortgages still don’t qualify for refinancing. All these Facts, figures and deductions indicate that both the commercial and the Residential Real Estate Markets in the U.S are facing a financial Crunch which is bound to rise at unprecedented levels in the coming years.