Tuesday, August 9, 2022

Popular targets also fell, U.S. Real estate reversal prices fell

We.real estatePrices are falling sharply, transactions are falling, and banks are tightening lending Showing signs of fading.

Los AngelesReal estate broker Lurie said several industrial real estate deals in Portland, Ore. and condo deals in Denver have fallen since the Federal Reserve raised its benchmark interest rate in May. In June, a buyer withdrew from a $18 million condo sale near Los Angeles, and in July the buyer’s offer was dropped by 10 percent.

Compared to the volatility of the stock market, bond market and cryptocurrency, the business real estate boom has cooled off slowly. But as financing costs rise, companies are saddled with $5 trillion in commercial real estate debt.investThere will be a re-evaluation of the people, their holdings and profit potential.

US commercial real estate transactions hit a record $375.8 billion in the first half of the year, but this is a backward indicator as deals take months to close and do not reflect current conditions, said Castillo, chief economist at MSCI Real Assets. Huh. Real situation due to the rapid cooling of the market.

He said that it felt something like something out of the cartoon “Willy the Wolf”, where Willy the wolf often dashed off a cliff to chase a beeping bird, only to find himself in the air, and then into a canyon. fell down. He said all other signs were pointing to a turning point in the housing market and prices were about to fall.

The US housing market is already showing signs of falling prices. U.S. commercial real estate prices fell 5% in the second quarter and are expected to fall further 5% by the end of the year, said Rosemont, co-director of strategic research at Green Street. In addition, apartment prices were also 4% lower in June than in May, while warehouse prices were down 5% in the same period. Prices fell 6%.

Warehouses and apartments have been in short supply in recent years, forcing investors to pay high prices for such items. Data from Green Street shows industrial real estate prices are still 42 percent higher than pre-pandemic levels, while mass housing prices are up 16 percent. However, both banks and potential buyers are currently re-evaluating the value of the property due to the high financing costs.

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