Monday, December 7, 2009

Fed's opinion on Real Estate Market

BY: Nicole Nelson

The Fed (Federal Reserve) is the central banking system of the U.S. The do many things such as enacting different rates for banks depending on how the economy is at a certain point of time. The Fed reports on how the economy is. Recently the Fed believes that the economy itself seems to be rebounding from the crisis that occurred during the fall of last year. Although the economy does seem to be rebounding, the Fed believes that the housing/real estate market is still struggling. The Fed reported that home prices are still declining. Also they stated that the commercial real estate market is one reason why the present economy is not rebounding as quickly as it should be. Things such as falling rent prices, vacancy rates rising and very little construction on the way is dampening the real estate market. Also, losses on commercial real estate are increasing which shows that the market is “very weak and, in many cases deteriorating”. Although the commercial real estate market is clearly not improving significantly or at all, the residential market’s outlook has improved. Home sales have continued to rise, with a majority of these sales coming from the purchase of less expensive homes. Although the turn-around from the financial crisis has taken some time so far, the turn-around is taking place. The fed stated recently, “This slow-motion recovery is going to take an extraordinary amount of patience.”


  1. I have been reading alot about this lately too. Commercial real estate really needs to improve in order for our ecomony to stand any chance at a full recovery.

    Posted By, Meredith Anderson

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