The Uncoupling of Southwestern Florida's Residential and Commercial Housing Markets
News-Press.com reports: In a recent localized article appearing on the Fort Myers/Southwest Florida-based Press-News.com, writer Gary Tasman spoke on the subject of Southern Florida’s two beleaguered housing markets – both commercial and residential – that have historically tracked each other through booms and busts. Mr Tasman stated that, while the residential sector has little prospect for near-term growth in pricing or construction, the commercial sector of multifamily housing faces fewer challenges and may mount a quicker recovery in the coming years.
This more optimistic forecast is manifesting in some important metrics being tracked in the multifamily market by Real Capital Analytics (RCA). Mr Tasman cites RCA in stating that “recovery rates on defaulted commercial and multifamily mortgages improved throughout the nation, rising to 67 percent in the first quarter.” In addition, “For the first quarter of 2011, commercial backed mortgage securities activity nearly surpassed all activity for 2010. Commercial back mortgage securities, when executed responsibly, function to bring more liquidity to commercial real estate.” Both figures are indicative of the multifamily sector’s momentum going into the new cycle."
There remain significant challenges from the previous cycle, however, that remain to be solved. One of those is the mountain of debt buyers took on to acquire and refinance properties during the boom, when values were near their peak. Mr Tasman stated that, “Real Capital Analytics reports that assumed debt remains to be the key source of distress financing. More than 25 percent of distressed sales in 2010 were financed through assumed debt - accounting for a larger share of that market than any other traditional lending source.”
View the full article on News-Press.com: The Uncoupling of Southwestern Florida's Residential and Commercial Housing Markets
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Posted by: Nina Turner