"The real estate market typically lags two quarters behind the economy," says Sciolla, "The major economic indicators are now more discouraging than we had anticipated."

Sciolla points out that the Greater Boston suburban market is driven mainly by high tech users, which have born the brunt of the recession more than the financial services industry, which populates the downtown area. Sciolla sees rents dropping five to seven percent by this time next year in the suburbs while downtown will experience a three to five percent drop.

But Sciolla notes that rents now are where the market should have been if the 1999 to 2000 dot com boom was taken out. "We've seen a 40% erosion already," notes Sciolla, "but rents were artificially high. But further erosion now puts the market a little below where it should be."