Market expert warns US real estate is a 'slow-moving train wreck'
foxbusiness.comPeebles Corporation founder and CEO Don Peebles and The Bear Traps Report founder Larry McDonald analyze market trends and the state of real estate.
A New York Times bestselling author and a real estate entrepreneur have started to echo similar warning signs amid «massive» issues within the commercial sector.
«It's a slow-moving train wreck,» The Bear Traps Report founder Larry McDonald said on "Mornings with Maria" Tuesday. «This is why the Fed is the beast in the market, it has the Fed by a stranglehold because it's close to $2 trillion of maturities in the commercial real estate space. And then, if you look at high-yield leverage loans and investment grade bonds in the U.S. corporate market, it's another $1.9 trillion. So the Fed is going to be forced this year to cut rates dramatically.»
«These buildings cannot service the debt,» Peebles Corporation founder and CEO Don Peebles added on the panel. «They're worth a fraction of what the original values were when these loans were made. And you're going to see massive defaults because there's no solution in many of these instances.»
Their comments are strikingly similar to Cantor Fitzgerald CEO Howard Lutnick’s warning last week that a «generational» shift was on the horizon, painting a «very ugly» picture for America’s real estate market in 2024.
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«I think $700 billion could default… The lenders are going to have to do things with them. They're going to be selling. It's going to be a generational change in real estate coming, end of 2024 and all of 2025. We will be talking about real estate being just a massive change, $700 billion to $1 trillion in defaults coming,» Lutnick stressed to Maria Bartiromo at the World Economic
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