... what percentage nationwide ..., that is.

I heard Steve Roach say that commercial building is already slowing, though the stats might not show it yet. A construction number is being released tomorrow. Many RETSs now are paying significantly less than T-bills. There's a Profunds fund that is inverse the commercial REIT index.

Re the opinion piece in Barron's, keep in mind this is Mike Morgan. He got into a pissing match with Lennar over some investment property he bought from them. He since has gone on a self-righteous crusade against them and the entire Florida real estate market. Don't get me wrong, I have puts on Lennar and think he's basically right about thinngs. But he isn't the objective observer he makes himself out to be. Barron's should have added a bio line.

I agree with Prescott, the good Bush. There are going to be way too many realtors fighting far fewer commissions at a time when the NAR monopoly is losing fights in legislatures and with regulaors, and there are all these new businesses coming online. Plus, sellers realizing they need to aim their sights lower price-wise, are probably much more sympathetic to the new players' pitches.

CR,

I havent followed the individual markets since I left commercial research a couple of years back, but I know where to pull the info. OC is at about 7% now, down from a high of 16% in early 03, but clearly they took advantage of mortgage company leasing. The vacancy rate rose in the last quarter for the first time since that peak. So, OC very may well still be tight, but that could easily be an issue like DC, which is tight because of govt spending largely. Look what happened to DC in the mid 90s when they decided to pare back govt spdg. Same type of thing can happen to any market if its main lease source dries up.

My point is that professional service jobs will definitely dry up in housing related areas, but as the economy slows, they will start to wither all over, and as companies hit a soft patch, they typically pare back costs which often means headcount. This is how the whole downward spiral presents itself - it doesnt have to be a specific trigger that changes economic momentum. This time it is housing, last time it was a biz investment bust. The question is always a matter of what feedback mechanism results from the bust, and what factors can mitigate. Last time would have been a severe consumer recession, but we offset with tax cuts, low rates, and housing equity extraction. None of those are coming this time around, so the chance of avoiding the consumer slowdown is about nil.

So think C+I+G+NE. Resid investment is tanking. Govt Spending is tapped out. You'll get a small lift from NE as imports slow and exports are helped by what will presumably be a falling dollar. That is for starters. Now, with that in place, the consumer slows, and when demand slows, you see the issue you are talking about above with revenue and corporate profits and once that is in play, you get the other parts of investment slowing - first cap ex, then comm building.

So, all we are doing here at this point is spectating. I dont see anything really that can be done to stave this off, particularly because I think monetary policy can only have a modest effect, and its not clear that we can even afford to cut rates to the bone again, given our country's financing needs. Sure, oil prices can pull back some, but to the extent they pull back a lot, it's for a bad reason - global slowdown.

I really think this is the dotcom bust, housing version, just in very slow motion, so you can't tell that you are repeating the same downward path, with different leading causing and lagging responses.

Anyone buying anything built in the past year is taking a gamble. When you are putting up houses at the rate these people have been over the past few years, just think about all the marginal construction workers and people posing as construction workers who are building these monstrosities. The stuff built now is going to be even worse, since they are going to try to slap it together asap so that they can give a 20% discount to the next FB. Crazy...