Real Estate Market Carnage
May 26th, 2010
The troubled commercial real estate market continued to ravage the community banking sector last month as federal banking regulators closed 23 banks, the highest monthly toll in nearly a year according to Darryl R. Isherwood of Fox Business. Check out New Bern NC Homes at www.ncpropertiesonline.com for housing information in the New Bern North Carolina area. In total, the April bank closings cost the Federal Deposit Insurance Corporation nearly $9 billion as banks loaded with commercial real estate and construction loans continued to falter at a record pace.
Palatka, a small town of less than 11,000 residents in Northeast Florida, has already seen its share of commercial real estate woes. Last month, another Palatka bank, First Federal Bank of North Florida, was shuttered by regulators when its capital slipped into negative territory from the pummeling it received at the hands of the commercial real estate market.
“Judging by what we’ve seen so far we think the size of the problem is going to increase,” said Matt Anderson, managing director of real estate analysis firm Foresight Analytics. Foresight’s bank watch list, which at the end of 2009 totaled 590 banks, is now at 645, Anderson said. For an up to date market report of real estate in New Bern see our website at http://www.ncpropertiesonline.com/Properties . In February, commercial real estate prices slipped again after four months of increases, bringing the peak to current drop in prices to a whopping 41%. With so much value flushed away, it is unlikely that loans written during the peak years of 2006 and 2007 will ever recover, Anderson said.
The April carnage brings the total in 2010 to 64 failed banks totaling $61 billion in assets. That is more than double the pace set through the first four months of 2009, a year in which 140 banks were shuttered.
