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Federal Reserve Announces QE3

The Federal Reserve announced another round of quantitative easing (QE3) on September 13, purchasing $40 billion of mortgage-backed securities per month until it has determined that the job market has made substantial progress.  The Fed also extended its commitment to keep its policy-rate near zero through mid-2015.  “Perhaps the latest round of QE will give banks an additional nudge to finally open the lending faucets,” said a report by Cassidy Turley.

Cassidy Turley’s “Insights:  Capital Markets – A Fickle Pickle” report overviews the current CMBS market, investor sentiments and provides rankings by total annual sales, noting that six major metro areas dominated sales activity in 2011:  New York; Los Angeles; Washington, DC; San Francisco; Chicago; and Boston.

Other report highlights include:

  • Investors have pushed the prices for the best properties to premium levels — activity fueled by increased debt availability to those who qualify — resulting in a very competitive market dominated by large institutional investors and wealthy private investors with pristine credit and deep pockets.
  • Sales volume in secondary markets accounted for 24 percent of the total sales in the United States, up from 20 percent in 2011.
  • Investment sales have generally trended up since 2010, and there is clear evidence that the improvement is being shared across more markets.