One obvious effect of the issues with the subprime markets hasbeen on the home market. "People have stopped buying new and usedhomes, at least at the rate we are used to," says moderator NormanNagel, a partner with Warady & Davis. Financing has also beenobviously affected. "The old days of having non-conformingloans…seems to be over," says panelist Marks Attwood, president ofthe residential development division of Lincolnshire, IL-basedAmcore Bank.In addition, more equity is required for loans and morepre-sales or pre-leasing is required, says panelist Bernie Cohen,vice president of Chicago-based Draper & Kramer Inc. Whereasdevelopers used to be able to obtain a construction loan for 90% ofthe cost of the project, loans are now maxing out at 75% to 80% andrequiring presales of condominium units at 50%, Cohen says.Interest-rate only loans are harder to obtain and are, then, onlyinterest for a few years, as opposed to the entire term of thefinancing. Interest rates have gone up but they are still lowcompared to 15 to 20 years ago, the panelists said.

Conduit lenders have not made a comeback yet, says panelistBarry Axelrod, senior vice president of Chicago-based Dwinn-Shaffer& Co. "It takes a certain supply out of the market" althoughthere are still financing opportunities such as life insurancecompanies, Axelrod says.

For retail, "Cap rates are inching up," but retail properties"are not moving as quickly," says panelist Ross Glickman, CEO ofChicago-based Urban Retail Properties. Real estate investmenttrusts focused on retail have been affected in the past couple ofmonths but "We think that real estate investment trusts in oursector have been overvalued," Glickman says. "Over the last severalmonths, the REITs in the shopping center sector have really taken apretty severe hit," Glickman says. Market values have been, attimes, as much as 20% and 30% below what they were nine months ago.Specialty retail is expected to be affected during the holidays inwhat some are predicting to be a train wreck, he says. "Big boxeswill prevail (as well as) the discounters, the mass merchandisers,"Glickman says. "Families are now prioritizing their spendingneeds."