Houston Econonomics Club Speaker Series: A New Model for the 2010 Economy
On Monday, January 25th, we attended a luncheon/speaker series hosted by the Houston Economics Club, the local chapter of the National Association of Business Economics. The topic was a New Business Model for the 2010 Economy: Adapt, Mutate, Migrate or Die. The speaker was Ted C. Jones, PhD Chief Economist of Stewart Title Guaranty Co.
Dr. Jones had some interesting observations on the recovery in the jobs market and commercial loan market. A few key points included:
-Only 15 of the 366 MSAs posted net job gains in November 2009.
- There are $3.5 Trillion in outstanding commercial loans. Approximately $400 Billion will need to be refinanced each year for the next 10 years. It is estimated that only $50 – $80 Billion is available to refinance these loans in 2010.
-Commercial Sales have fallen 70% from 2007. 2007 posted sales of $557.8 Billion; however, 2009 posted sales of only $54.4 Billion.
The lack of available financing in the commercial market will be a major issue for years to come unless appropriate measures are taken, which may include a GSE for commercial/lender of last resort and a full analysis is completed on the amount of the derivatives liabilities attached to commercial real estate.
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Katherine E Avery has experience supporting consulting services for pension fund and institutional investment clients. Ms. Avery has experience in underwriting and consulting for over $2.5 billion in commercial real estate assets.
