Reports

WEBER COUNTY

We are beginning to see signs that the Utah economy is beginning to stabilize; monthly losses in employment are shrinking, unemployment claims are dropping, and permits for new homes are up. At the national level the stock market had an incredible year in 2009, the Christmas retail season was better than expected, and housing prices have managed slight increases in many urban areas. It still appears, however, too early to call it bottom for the commercial real estate sector, nationally or locally.

By Bob Springmeyer

Commercial Real Estate Mired in Quicksand despite Signs of Economic Recovery

The third quarter of 2009 brought signs of relief to a U.S. economy fighting to emerge from what has been coined the Great Recession. Most measures of economic activity moved in upward trends—gross domestic product turned positive after four quarters of decline; industrial production gained; stock market indices have been surging.

After more than a year spent in suspended animation lagging already shattered housing markets, the commercial real estate industry hits bottom in 2010, suffering a surge of painful writedowns, defaults, and workouts. Massive government infusions finally build up loss reserves in financial institutions to levels allowing them to foreclose or strike deals with many overleveraged borrowers.