What could the spillover to CRE look like? The tail-risk disaster scenario, says Kiran Raichura, property economist at Capital Economics, is that stricter lending (in combination with rising rates and working from home) jacks up defaults among property owners, forcing regional banks to seize the underlying assets. Banks don’t want fallow real estate assets clogging up their balance sheets, and will probably feel pressed to unload them at a discount. Forced selling would pile even more downward pressure on prices.