Crains Chicago today showed a chart that shows just how bad the Great Recession is impacting the rate of commercial mortgage delinquencies. At the end of Q1-2009, 3.6% of American Commercial mortgages were delinquent and 5.6% of Chicago area loans were behind in their payments---Both are almost 4 times worse than what was typical during 2006.
Of the Top-100 US Metro Areas, Foresight Analytics says that these 10 areas have the worst delinquency rates for the commercial mortgage market:
- Warren-Farmington Hills-Troy, Michigan 6.3%
- Miami, Florida -- 5.7%
- Chicago -- 5.6%
- Grand Rapids, Michigan 5.4%
- Milwaukee, Wisconsin 5.2%
- Indianopolis, IN -- 5.1%
- Jacksonville, FL 5.0%
- Sarasota, FL--4.9%
- Dayton, Ohio -- 4.5%
- Lake County, IL / Kenosha County, WI 4.4%
In the 1990's commercial mortgage delinquencies peaked around 9% and it's likely that as this recession lingers, unemployment climbs and vacancies rise--the rate of delinquencies will continue to escalate.
What I found quite interesting is that most of the "top-10" come from the Midwest and Florida---but as we all know the credit crunch has hurt consumers in California, Nevada, Arizona and Oregon as hard as the midwest---so I'm guessing in a few more quarters time you'll be seeing communities like Phoenix, LA, Las Vegas, and Portland creeping to the top of the list as well.