As published in Scotsman Guide's Commercial Edition, May 2007.
As Baypoint Financial Services' Kevin Robbins details in our Lead Article, there's a lot we can learn from watching a few lines.
The slope of a yield curve, he explains, is a large determinant of the next market cycle. If it's a steady uphill climb, that's smooth sailing. If not, it could be time to act.
In the big picture, however, our biggest concern isn't recognizing whether things are up or down. It's knowing how to jump through them, either way.
As the residential real estate finance market takes another one on the chin, commercial brokers and investors look to ways in which they can prepare for whatever slopes come ahead.
Risk is a key word in most commercial deals. And even as most commercial sectors report steady growth, certain risks could present themselves in the next few months.
Fraud has slipped into the multifamily sector, with false rent rolls, phony buyers and other misrepresented information turning up in condominium-related acquisitions.
Construction has shown signs of strain, buoyed by a perceived build-up in housing that could affect prices in other areas.
Real estate investment trusts (REITs) -- a stalwart in recent years -- also took a stock jolt with news of a major nonprime lender's bankruptcy in April. Analysts point to a potential increase in residential mortgage defaults, even in A-paper loans, as another weight that could drive REIT prices down.
Interest-only loans, another residential carryover, also are gaining traction and receiving scrutiny in some commercial sectors. For more, see Trends.