“Are the “commercial real estate” market and the “residential real estate” market strongly coupled?”
I will take a stab at this.
It depends. :-)
In today’s economy I would argue they are moderately linked.
The linkage is that if large institutions and investors and banks are forced to liquidate commercial real estate holdings because they cannot pay the higher interest rate mortgage that leaves less money available to prop up the residential real estate market.
That is a bigger issue these days than normal because of the rise of institution investment in residential real estate that has kept prices very high in many markets.
CRE is the worst place to be—Residential Real Estate in “hot” markets is high risk but not as bad as CRE.
SaxxonWoods: You state the obvious, but thank you anyway.
cgbg: Your contribution provides pertinent info (e.g., I wasn't aware that institutional investment in residential real estate was more than non-negligible) and sheds some actual light on the matter. Thank you!
Regards,