Home Values Continue Their Fall - Impacting Investment Real Estate Lending

On Tuesday May 31st the S&P Case-Shiller Home Price Index fell again, showing signs of continued downward pressure on home prices. The index is down roughly 33% since July of 2006 and below the previous low set two years ago. This continued downward spiral in prices is putting additional pressure on Banks already struggling with capital issues, while at the same time limiting fresh capital from coming into residential investment real estate. Until commercial lenders and investors are confident prices have hit bottom, it is unlikely that we will see a pickup in capital being lent for residential investment properties.