Fed Chairman Flags Concern About Commercial RE

Federal Reserve chairman Ben Bernanke told Congress on Monday he is concerned about the condition of the commercial real estate market. Testifying before the House Budget Committee, the Fed chairman noted construction spending "decelerated" in the third quarter, after posting "robust gains" during the first half. He said declining sales are affecting the business community, which is hurting plans for building. He also cited "reduced credit availability from banks and other lenders." The economy is expected to shrink the rest of this year and into early next. "We are in a serious slowdown for the economy," Mr. Bernanke said, adding that, "whether it is called a recession or not is of no consequence." The nation's unemployment rate -- now at 6.1% -- could hit 7.5% or higher by next year, causing more consumers to go delinquent on their home mortgages, exacerbating falling home prices.