WASHINGTON, DC-During his two days of testimony before Congress, Federal Reserve chairman Ben Bernanke has confirmed or otherwise informed Congress members of the following: there will be “significant losses” associated with subprime markets, but in the long run they are merely bumps in the road; the derivatives based mortgage-backed securities that seeded Bear Stearns Cos.’ specialty hedge funds–funds that have lost most of their value–can be counted among those bumps; that the subprime mortgage market issues are more widespread than originally thought but hasn’t caused a systemwide credit crunch; that inflation is a concern but not enough to raise rates; that the dislocation and pain in the market now will get worse before it gets better.

Other than the information about interest rates, most of the commercial real estate market knew all this and have long factored it into financial and investment planning, according to an informal survey of various players in the commercial real estate debt and equity markets by GlobeSt.com.

“I see the testimony of the last two days as fairly positive for real estate markets now and going forward,” Scott A. Singer, EVP of the New York City-based the Singer & Bassuk Organization tells GlobeSt.com. “What the real estate industry needs right now are statements of stability–and to a certain extent we got one.”

Singer also liked that Bernanke was open about the potential risks facing the industry. “He was clear about the significant risks going forward but emphasized that they are prospective risks. Inflation, for instance, has not gone away but the numbers are a little higher than where he wants them to be. That type of news is a welcome change from the much more inflammatory and currently worrisome news coming out of subprime markets.”

Theodore R. Gamble, Jr., managing director at the Prescott Group, tells GlobeSt.com that the apparent decision by the Fed to hold steady on interest rate is also no surprise. “The Fed simply doesn’t have the luxury of raising rates. We have a weak housing sector already. It can’t lower rates as that would send wrong signal and would be counterproductive. So I am not surprised given all those factors they are pursuing a cautious but steady route.”

Bob Bach, SVP, national director of research, at Grubb & Ellis also likes the Fed Chairman’s middle of the road prognosis for the economy–moderate growth, moderate threat of inflation.

“It’s the best of both worlds,” he tells GlobeSt.com. “Moderate growth means leasing market will continue to perform well. Last quarter the national office vacancy rate came down by 30 basis points–and that suggests to me there is room to come down even further.”

“The fact is growth has been strong enough to propel leasing markets forward but weak enough to keep interest rates from spiking.”

Representatives from the residential real estate markets were, by contrast, less pleased with the testimony and overall state of the industry.

Morgan Brown, COO of New Day Trust Mortgage, a direct residential mortgage lender based in Orange County, CA tells GlobeSt.com that many of the current problems were well identified earlier in the year. “However the chairman refused to address them in previous testimony even as the signs of greater systematic distress were becoming clear. The rest of 2007 and early 2008 does not look good for housing.”

The true question is will an economy buoyed by a strong housing market find growth elsewhere to compensate for housing’s decline, he continues. “I am not so sure that it can.”

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