Marketplace®

Daily business news and economic stories

Commercial is the new residential

Commercial real estate might soon be heading the way of the residential housing market, according to a report out by Moody's. But Janet Babin explains why Moody's isn't ready to panic yet.

TEXT OF STORY

Scott Jagow: We all know how bad the residential housing market is. But this morning, there’s evidence that commercial real estate might be next.
Marketplace’s Janet Babin reports from North Carolina Pubic Radio.


Janet Babin: The Moody’s Investors Service report says commercial property values are down 1.2 percent from August to September. While the figure’s small, the decline follows years of decisive increases for the sector.

Still, Tad Philipp with Moody’s says they’re not hitting the panic button here:

Tad Philipp: The financing crunch is affecting commercial real estate. Like every other sector, it’s going to cause our prices to go down. That will cause delinquencies to go up. All that’s true. The key is the degree, and we believe it will be more of a reversion to normal levels than an alarming level.

Philipp says the historical default rate on commercial properties is about 1 percent.

I’m Janet Babin for Marketplace.

Latest Episodes

View All Shows
  • Marketplace
    9 hours ago
    25:29
  • How We Survive
    12 hours ago
    14:10
  • Make Me Smart
    14 hours ago
    25:13
  • Million Bazillion
    14 hours ago
    31:13
  • Marketplace Morning Report
    16 hours ago
    7:05
  • Marketplace Tech
    21 hours ago
    6:10
  • This Is Uncomfortable
    2 months ago
    37:19
  • Financially Inclined
    2 months ago
    12:30
  • The Uncertain Hour
    4 months ago
    22:50
  • Corner Office from Marketplace
    5 years ago
    20:58