Buyers and sellers should be aware of a general economic slow down in all markets. Everyone will feel the effect of the leverage finance and subprime markets. Since I have been writing about the subprime markets for quite some time, I will focus briefly on the effects of the decline in the leverage finance market.<\/p>\n
Leverage finance typically covers loans banks and other financial institutions lend to corporations or large private buyers. Companies like Blackstone use the leverage finance market to buyout companies and REITs. Over the past few years there has been a significant up-tick in Mergers & Acquisitions, leading to strong economic growth. As finance markets close (or shrink significantly) businesses will be less able to get large loans at favorable rates. As buyouts and mergers shrink, expect a dip in the equity markets. Looking at the Dow over the past week bears this out.<\/p>\n
Very few people beyond the financial community pay attention to the leverage finance markets. These markets significantly impact the large commercial real estate market. When financing tightens at the top, the price effects trickle down. This could mean a significant negative impact on the commercial real estate market is coming.<\/p>\n
All of this will create a drag on the economy, which will serve to slow down most, if not all, real estate markets. Unfortunately this could force even more defaults, putting many real estate markets in quite a tailspin. Buyers with excellent credit that can afford to wait six months to a year to buy will have their pick in most minor markets and increased negotiating leverage in major markets.<\/p>\n","protected":false},"excerpt":{"rendered":"
Buyers and sellers should be aware of a general economic slow down in all markets. Everyone will feel the effect of the leverage finance and subprime markets. Since I have been writing about the subprime markets for quite some time, I will focus briefly on the effects of the decline in the leverage finance market. […]<\/p>\n","protected":false},"author":16,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_crdt_document":"","jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[2,8,26,5],"tags":[],"class_list":{"0":"post-1746","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"hentry","6":"category-general","7":"category-investment","8":"category-lending","9":"category-real-estate","11":"no-featured-image"},"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"jetpack-related-posts":[{"id":1775,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/1775\/the-national-association-of-realtors-is-simply-outrageous\/","url_meta":{"origin":1746,"position":0},"title":"The National Association of Realtors is Simply Outrageous","author":"Cooksquared","date":"August 8, 2007","format":false,"excerpt":"This title truly comes from the heart. Reading the Wall Street Journal today, I stumbled across the latest report from the lead economist at the National Association of Realtors. In the face of overwhelming negative information and despite their own lowered forecasts, Mr. Lawrence Yun states, Existing-home sales should be\u2026","rel":"","context":"In "Real Estate"","block_context":{"text":"Real Estate","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/real-estate\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":1745,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/1745\/can-i-still-get-a-mortgage-in-todays-lending-markets-with-cold-hard-cash-and-great-credit-certainly-otherwise\/","url_meta":{"origin":1746,"position":1},"title":"Can I Still Get a Mortgage in Today’s Lending Markets? With Cold Hard Cash and Great Credit, Certainly; Otherwise…","author":"Cooksquared","date":"August 4, 2007","format":false,"excerpt":"On Friday, August 3rd American Home Mortgage officially closed its doors. That same week Standard & Poor's cut its outlook on Bear Stearns from stable to negative amid fears of firm wide exposure to subprime lending and the leverage finance market. If all that were not bad enough, the leveraged\u2026","rel":"","context":"In "General"","block_context":{"text":"General","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/general\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":1555,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/1555\/subprime-lending-fallout-goes-upstream-to-take-down-two-major-hedge-funds-what-does-this-mean-to-real-estate-investors\/","url_meta":{"origin":1746,"position":2},"title":"Subprime Lending Fallout Goes Upstream to Take Down Two Major Hedge Funds: What does this Mean To Real Estate Investors?","author":"Cooksquared","date":"June 20, 2007","format":false,"excerpt":"Two major Bear Stearns Hedge Funds face foreclosure due to their significant exposure to the subprime lending market. While this does not fall under the category of real estate investor, I spent last summer working for Bear Stearns and interacting with many of their hedge funds. Based on the very\u2026","rel":"","context":"In "Blogging"","block_context":{"text":"Blogging","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/blogging\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":2251,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/2251\/california-sub-prime-bailout-rewarding-the-feckless\/","url_meta":{"origin":1746,"position":3},"title":"California Sub-Prime Bailout: Rewarding the Feckless","author":"Brian Brady","date":"November 23, 2007","format":false,"excerpt":"Governor Schwarzenneger brokered a bailout for California sub-prime borrowers with four major servicers: Countrywide, GMAC, Litton and HomeEq - which collectively service more than one quarter of subprime loans to people with poor credit - agreed to maintain the initial, lower interest rate for some subprime borrowers whose rates are\u2026","rel":"","context":"In "Investment"","block_context":{"text":"Investment","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/investment\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":1140,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/1140\/subprime-mortgages-turning-really-bitter-lemons-into-lemonade\/","url_meta":{"origin":1746,"position":4},"title":"Subprime Mortgages: Turning Really Bitter Lemons into Lemonade","author":"Cooksquared","date":"March 13, 2007","format":false,"excerpt":"It appears the Wall Street Journal has sniffed out major issues in the sub prime lending market only two weeks after Brian Brady broke the news here first. They focused on one of the strongest lenders, New Century, who is now poised to take the biggest fall because of their\u2026","rel":"","context":"In "Blogging"","block_context":{"text":"Blogging","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/blogging\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":3754,"url":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/3754\/a-realtors-life-deeply-spiritual-and-cheesier\/","url_meta":{"origin":1746,"position":5},"title":"A Realtor’s Life: Deeply Spiritual and Cheesier","author":"Thomas Hall","date":"August 4, 2008","format":false,"excerpt":"I admit my mind works a little differently than most - I like to write and talk about things that are current - so, in light of the past week's recent events, I decided that I wanted to correlate last week's LA earthquake, the current credit crunch and my recent\u2026","rel":"","context":"In "Lending"","block_context":{"text":"Lending","link":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/category\/lending\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]}],"_links":{"self":[{"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/posts\/1746","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/users\/16"}],"replies":[{"embeddable":true,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/comments?post=1746"}],"version-history":[{"count":0,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/posts\/1746\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/media?parent=1746"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/categories?post=1746"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.bloodhoundrealty.com\/BloodhoundBlog\/wp-json\/wp\/v2\/tags?post=1746"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}