CREDIT CRISIS

Good to recall the incident that started this particular snowball effect we are still living in.

After viewing this consider that the Alt-A and Option ARM’s that are going to re-set over the next two years.

Combine this with the many Commercial properties that are coming up for renewal over the same period and the only conclusion that is rational is that prices are going to decline. Again.

No point in arguing the issues, only in what to do about it.

Expect another 10-33% drop in residential value, possibly a 66% drop in Office, Industrial and Retail property with an anticipated 20-45% drop in Multi-Family residential.

Many will argue that the residential values will not drop so much. I respond that in certain markets, yes there will be possibly no drop. As a whole the North American (yes Canada included) market is facing a financial chasm larger than ever before.

1) falling SFR prices and values will make it cheaper to own someone else’s foreclosed house, therefore downward pressure on the rental market.
2) wiping out the retail marketplace, the internet for commerce is a factor that cannot be ignored.
3) with 1/3 less in their numbers, those who come after the baby boomers will not have the same volume to buy the homes and businesses that will be coming onto the marketplace in ever greater numbers … this alone accounts for a 33% drop (if not more) in all asset values.

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