Housing: Will This Spring Bump Continue? Commercial Real Estate: Maturing Loans Remain a Concern


Federal Reserve Bank of San Francisco

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June 23, 2012

The RE Lending Risks Monitor discusses key trends in residential and commercial real estate markets and related lending issues, geared towards lenders within the 12th Federal Reserve District (nine western states).

This monitor highlights some positive signs for housing markets in the west. Declining inventories of for-sale homes and other factors suggest that this year’s “spring bump” in housing may be different than the past few years. This would be a welcome development for homeowners and mortgage lenders. Commercial real estate markets also are seeing positive trends, but a large volume of maturing income property loans originated near the peak of the market 5-years ago raises the potential for some near-term challenges for banks and additional credit losses that may be realized.