Via Steve Brown of the Dallas Morning News @SteveBrownDMN on twitter
The real estate business runs on money.
Along with new jobs and population growth, you need a lot of moolah to pay for all that construction and investment — billions and billions of dollars in North Texas.
So word of a slowdown in property market funding isn’t what industry members want to hear and could affect the number of construction cranes rising on Dallas’ skyline.
“What we are seeing right now is a slowdown in the capital markets,” said James Lee, chairman of the Counselors of Real Estate, an 1,100-member organization of real estate advisers and executives from around the county. “Capital markets are pullng back right now.”
Lee said new rules governing commercial mortgage-backed securities, which kick in this summer, will affect the dollars available for commercial real estate.
“Insurance companies are cutting back,” Lee told members of the National Association of Real Estate Editors meeting this week in New Orleans. “They are hitting their target allocations.
“We are going to see a real slowdown through the rest of this year,” he said. “There is much greater risk management attention throughout the sectors — both commercial and residential.”
Lee also said tightening federal regulations and lending requirements with the banks will reduce real estate lending.
“The new regulations are going to severely curtail the amount of money available for construction from the banks,” he said. “On the residential side, it affects both home purchasers — because of the availability of capital — as well as developers because they don’t have the capital to go out and do the tract development they like. Read More >