Monday, March 3, 2008

Commercial Real Estate is now slowing down dramatically...

Now commercial development is slowing down quickly.....

"Spending on U.S. building projects in January fell by the most in 14 years as the housing slump worsened and construction slowed on hotels and highways. The 1.7 percent decrease, more than twice the fall economists forecast, followed a revised 1.3 percent drop in December that was steeper than initially reported, the Commerce Department said today in Washington. Construction spending has contracted for four straight months.

Homebuilding is in a third year of declines as sales weaken and builders halt new projects to lighten inventories.

Stricter borrowing rules and lower demand are also restraining commercial developers, creating an even greater drag on growth." <--This is what the FDIC is worried about as it then really puts the pinch on regional banks that might have overextended themselves to real estate development in the last few years. Are these banks capitalized properly to handle bad commercial loans and bad residential loans at the same time? Dan Ross

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