On Monday April 13th UC Berkeley’s Fischer Center for Real Estate and Urban Economics held it’s 14th annual conference in San Francisco. Keynote speaker and well known real estate guru Ken Rosen did not paint a rosy picture for a short term recovery.

“The world is structurally changed and it’s going to take a long time to get back to a system that is sustainable,” Rosen said. “The underlying assets are still going down at accelerating rates.”

Rosen predicts that both residential and commercial real estate values will continue to get pressured from three key dynamics:

• Unemployment will continue to climb, likely topping 10% in the near future (meaning millions of new job losses)
• The credit markets will remain constrained for some time, and interest rates will begin to rise.
• The newly conservative consumer is not going to return to the debt-addicted lifestyle and spending will continue to be curtailed.

With residential values continuing to plummet and some office values down 35%-40% conservative investing is key. Private mortgage lenders can protect their trust deed investors through conservative underwriting and low Loan-to-value lending. For equity investors with money this is a great time to buy as values are highly compressed.