Us: So how does this up/down cycle compare, nationally and locally, to previous real estate cycles?
Tracey: In the past, housing downturns have often accompanied a more general recessionary environment. In this particular instance, the housing downturn can be pinned to very specific events, and may be a major cause of recession, rather than the other way around. And interestingly, there has been a significant contagion with regard to the impact of the subprime crisis on credit availability in commercial markets. From commercial loan data, there's nothing to suggest that commercial real estate has come to be at particularly greater risk of default in the last year than anytime in the previous decade, and yet the commercial mortgage-backed securities pipeline has completely dried up.
