Despite a boom in residential construction activity, construction employment growth has remained lackluster and is up just 100,000 from the trough in early 2011. This is because residential building declined by more than residential employment resulting in value added/worker falling from about $80,000/year to about $60,000/year as employers kept their best workers. But with total construction hours now above previous highs, expect 20,000 new hires/month for the next few years.
Elliot F. Eisenberg, Ph.D.
GraphsandLaughs, LLC
www.econ70.com
loans
Real-estate Firms Managing Selling Volume of Distressed Commercial Mortgages
Firms, known as special servicers, are dealing with souring loans backed by commercial-mortgage-backed securities, or CMBS: a total of $90.9 billion through the end of September, compared with $73.8 billion at the end of last year, according to credit-rating firm Fitch Ratings. But the pace at which those loans have been resolved has picked up at an even faster rate, with $27.9 billion recovered by special servicers from bad loans in the third quarter, compared with $8.9 billion in the first quarter, according to Fitch. Read more…
Small Business Lending Bill Advances to Senate Floor
NAR is urging the Senate to OK legislation that would create a $30 billion small business loan fund. NAR also wants the bill to allow credit unions to increase loans to commercial real estate. Similar legislation has passed the house but Senate prospects are unclear. For more information, contact Vijay Yadlapati at 202-383-1090 or vyadlapati@realtors.org.
Commercial Loan Losses – Large but Bearable
Bearable — assuming banks will book the losses over time and offset them with earnings from healthier loans. But that convenient scenario may not play out for all banks, leaving investors potentially exposed to shock hits from commercial real-estate exposure. It will pay to sift through banks’ first-quarter earnings, which started to come out last week, for signs commercial real estate could yet cause unexpected pain. Read more…
