2009 Predictions: U.S. Economy – Real Estate

These predictions were originally posted on my website www.williamstickevers.com on January 10 and 25, 2009. 

Economy: Real Estate

  • The U.S. housing crisis will continue to deepen with existing home sales dropping another 12 percent while existing home prices fall another 5 percent as the nationwide inventory of foreclosed homes and other distressed properties reach record levels. (Jan. 25, 2009)    

  • Commercial Realty Collapse in 2009: The next major development in the economic crisis will be the collapse of the commercial real estate sector due to widespread overcapacity of major retail chains, major shopping malls, strip malls, and nail salons. The eagerness for banks and lending institutions to finance commercial real-estate transactions will dry up, resulting in canceled expansion plans, increasing job layoffs, and declining tax revenue. (Jan. 10, 2009)
    NOTE (7/22/09): (Bloomberg) U.S. commercial property prices fell 7.6 percent in May from a month earlier, bringing the total decline to 35 percent since the market’s peak, Moody’s Investors Service said in a report this week. Commercial properties in the U.S. valued at more than $108 billion are now in default, foreclosure or bankruptcy, almost double than at the start of the year, Real Capital Analytics Inc. said earlier this month.

    NOTE(4/16/09): NEW YORK (Reuters) – General Growth Properties Inc, the second-largest U.S. mall owner, declared bankruptcy on Thursday in the biggest real estate failure in U.S. history. The Chicago-based company, which owns such valuable malls as Fashion Show in Las Vegas and Faneuil Hall Marketplace in Boston, listed total assets of $29.56 billion and total debt of $27.29 billion. General Growth’s filing in the U.S. Bankruptcy Court in Manhattan makes it one of the largest nonfinancial companies to succumb to the global financial crisis. It is also the biggest bankruptcy of a U.S. real estate company, according to BankruptcyData.com.
    NOTE (2/19/09): Retail consultant Howard Davidowitz of
    Davidowitz & Associates as of February 19th
    predicts that 220,000 stores may close this year as more Americans begin to save and spend less. Among the brandname stores Davidowitz says are in trouble:  

  • Nordstrom
  •  Neiman Marcus
  • Tiffany
  • Jeweler Zale Corp.
  • Saks
  • J.C. Penney
  • Sears
  • Six Flags
  • Macy’s

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