NAR expects downturn to continue through New Year

WASHINGTON – The National Association of Realtors last week predicted that the current economic downturn will slow commercial real estate markets until at least the middle of 2009.
NAR’s Commercial Lending Indicator for Brokerage Activity slowed 1.7 percent, to 116.5, for the three-month period ending Sept. 30. The CLI had been at 118.5 in the second quarter and was 3.1-percent higher, at 120.3, in the third quarter of last year.
The CLI is a 13-variable composite designed to produce a singe indicator of future market performance. The CLI drop shows that net absorption and the completion of new commercial buildings are “projected to weaken over the next six to nine months,” NAR said.
“Aside from weakening conditions in the index variables, the commercial mortgage-backed securities market is all but frozen, making it very difficult to roll over existing debt that is coming due,” Lawrence Yun, NAR chief economist, said in a statement.
The National Association of Realtors is the nation’s largest trade association, with more than 1.3 million members in all aspects of residential and commercial real estate. Additional information is available at www.realtor.org.