Hard Times Ahead for Commercial RE?
Our nation's residential real estate market, and out Gatlinburg real estate market, have suffered greatly over the past three years. Prices have dropped and foreclosures have mounted, volume dried up, and real estate agencies and agents dwindled dramatically. While the outlook for Smoky Mountain residential real estate is looking up , our area's (and the entire country's) commercial market may struggle for some time to come. Here is a picture from earlier this year of a bustling business in the Wears Valley Community: And here is how the same commercial real estate looked when I drove past it last weekend: Once again, the enemy is excessive debt and over optimistic lending. Many commercial real estate purchases are financed by interest only mortgages and most, if not all, commercial loans are short term in nature. Most require that they be renewed every 3-5 years at the then current terms and there in lies the rub. The bank regulators are requiring that commercial loan b...