A few months ago, I warned about the coming commercial real estate crash. This week, I want to warn you about another crisis that’s already here: banks are not financing real estate that is not revenue-producing.

As a ranch and real estate investor, I’ve met with several banks during the last few months. And they all say the same thing: in these challenging economic times, they are not willing to finance land that doesn’t immediately produce revenue. In other words, unless there are oil wells or cattle on the land, you can’t get financing for it.

This is a problem because financing is how real estate deals are made. And real estate is a huge part of economic growth. If the sources for financing for real estate are drying up, you can be sure that we are nowhere near the end of the recession.

Today we’re going to take a break in our series on alternative energy.  I want to go back to June 25 when I wrote on this blog:

“we are facing a ‘ticking time bomb.’ Why?  Because some $1.3 trillion in mortgage loans to commercial properties will come due between now and 2013.”

Now, two months later, Investor’s Business Daily is making the same warning:

http://www.ibdeditorials.com/IBDArticles.aspx?id=335660380569943

Many people see the recent uptick in the stock market as proof that the economy is coming back.  But listen to what IBD warns:

“But is this daylight at the end of the tunnel or the beam of an oncoming locomotive of commercial real estate insolvency coming down the tracks on a collision course with a shaky economy?”

I’m afraid it still looks like a train from where I am.

The article notes that: “Commercial real estate (CRE), valued at $3.5 trillion in the U.S., has experienced a 39% decline in prices from the peak only two years ago, according to the MIT Center for Real Estate.”

So hold onto your wallets.  We’re not out of the economic woods just yet.  In fact, things might get worse before they get better.