Home > Uncategorized > May have to wait to buy foreclosed commercial properties.

May have to wait to buy foreclosed commercial properties.

Real estate investors itching to buy foreclosed commercial properties may have a long wait.

That’s because bank lenders are likely to hang on to the bad real estate deals said Dr. Mark Dotzour, chief economist at the Real Estate Center at Texas A&M University.

“The transaction volume on the investment sales side of things is going to stay low,” Dotzour said. “The rest of these properties that are balled up in commercial banks are not going to come out.”

“They don’t have sufficient capitalization in the banking system to recognize those losses.”

Dotzour said the banks will just extend their troubled loans to remain solvent.

“For all these people who are waiting for a big flush of properties out of the bank,” he said. “They are going to cocoon those assets and leak them out a little bit at a time.”

Dotzour said that most American businesses are keeping their cash held tight.

“Businesses are making money and they are not reinvesting it — they are hoarding cash,” he said. “Businessmen and women around this country have 3 trillion dollars doing nothing.”

Dotzour said a high level of uncertainty about government and its role in the economy is causing consumers and businesspeople alike to postpone decisions.

Once that logjam breaks, he’s optimistic about Texas.

“2011 could be a big year for Texas,” Dotzour said. “We are going to lead the way for a nation that’s going to be slow to come out of this.”

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