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[2]:135 By 2008, Lehman had assets of $680 billion supported by only $22.5 billion of firm capital. From an equity position, its risky commercial real estate holdings were thirty times greater than capital. In such a highly leveraged structure, a three- to five-percent decline in real estate values would wipe out all capital. [3]
As banks began to give out more loans to potential home owners, housing prices began to rise. Lax lending standards and rising real estate prices also contributed to the real estate bubble. Loans of various types (e.g., mortgage, credit card, and auto) were easy to obtain and consumers assumed an unprecedented debt load. [253] [222] [254]
As the economy tries to rebound from its horrific slump, commercial real estate has remained a potential source of trouble. Both Federal Reserve Chairman Ben Bernanke and Treasury Secretary Tim ...
Office is the most prominent sign of a struggling commercial real estate market. The commercial real estate collapse has been most evident in the office sector, with vacancy rates at nearly 1.5 ...
One 2017 NBER study argued that real estate investors (i.e., those owning 2+ homes) were more to blame for the crisis than subprime borrowers: "The rise in mortgage defaults during the crisis was concentrated in the middle of the credit score distribution, and mostly attributable to real estate investors" and that "credit growth between 2001 ...
The hybrid-work trend and high interest rates have sent commercial real estate values crashing in major cities, with Morgan Stanley warning earlier this year that office prices could face a 30% ...
Real estate bubbles are invariably followed by severe price decreases (also known as a house price crash) that can result in many owners holding mortgages that exceed the value of their homes. [ 32 ] 11.1 million residential properties, or 23.1% of all U.S. homes, were in negative equity at December 31, 2010. [ 33 ]
Goldman is back with a 16-years-later look at the housing market crash of 2008—and finds affordability is even worse right now Sydney Lake October 11, 2023 at 3:00 PM