According to the Baltimore Sun, Columbia’s master developer plans to lower the estimated market value of its remaining, unsold residential lots in the Howard County community in response to the overall real estate slowdown that is affecting commercial properties as well.

General Growth Properties Inc. expects to write down by $77 million the market value of two communities planned for Laurel and one in Fairwood in Prince George’s County, reducing the land value of the Laurel communities to $141 million and of the community in Fairwood to $60 million.

A spokesperson for the company, which sold more than 12 residential acres in Columbia in 2006 and two residential acres in all its Maryland planned communities from January through September, attributed the action to a need for lower prices brought on by weakened demand for land due to canceled sales by homebuilders.

The company’s Columbia land holdings alone could support an additional 246 units of new housing, including a mix of single-family and multifamily, according to Marsha S. McLaughlin, director of planning and zoning for Howard County.

General Growth’s action may herald possible further drops on commercial real estate values as well as the current credit crunch continues.

The quarterly transaction-based index (TBI) from MIT’s Center for Real Estate shows a third quarter drop of 2.5 percent in the value of commercial property held by pension funds, the most serious downturn since the fourth quarter of 2001.

And last month’s Moody’s Investors Service report showed a 1.2% decline in the value of commercial property in September from August, indicating that even though commercial borrowers only rarely default, commercial property lenders are apt to raise the bar on qualifications for commercial loans.

Tags: maryland real estate, real estate bubble, real estate trends, residential real estate

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