A leading real estate consultant who tracks appraisal trendsdoesn't see net operating incomes increasing enough to supportexisting values. This company expects cap rates to move up andvalues to head down give or take 15% before bottoming. That's notterrible given the significant increase in prices over the pastdecade. But again, for the late buyers and their lenders, it's notwhat they were betting on.
A pension fund advisor with ample funds to allocate says they'rehaving trouble finding deals. Sellers are holding out for topdollar, while buyers see the writing on the wall (see above). "It's hard to get anything done. Sounds like what was happening inthe housing market about 12 months ago before reality set in.
An executive from a major financial company says borrowers aregetting leeway: "A lot of people owning loans don't want the assetsthat are underwater so we are forebearing." The absence ofheadlines about owner defaults speaks to how many lenders and theirborrowers are working in frenzied states to stay of out of thenewspapers. "I hope I can survive, " says one bleary-eyedbanker.
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