There has been tremendous damage done in the commercial real estate market because of the repricing of credit, said Richard LeFrak, president of LeFrak Organization, a real estate development company.
Going forward, conditions could grow even worse, according to LeFrak. (To hear the full interview, watch the video to the left.)
"There's no question that demand is going to be down if we're suffering layoffs," he said, in an interview on CNBC. "White collar jobs are going to disappear, and there's less demand for office space."
As for residential real estate, LeFrak said he thinks people are overreacting.
With Fannie Mae and Freddie Mac around, buyers don't have to worry about the repricing of credit in that market, he said. As long as they qualify for a loan, they can still use Fannie and Freddie, he said.
With that, LeFrak remains positive, noting that he is not negative at all about the apartment sector.
LeFrak said he believes that selling in the stock market has been overdone, noting that stocks of real-estate investment trusts have been cut in half.
LeFrak cautions buyers to use good judgment.
"And if your ever going to be able to buy a - let's say the underlying assets of a company like Vornado - at under, New York real estate, at under $400 a foot when it was traded for $1300 a foot just 6 months ago. That may have been an inflated price, and the other one is a highly deflated price, so you know, I think you have to kind of pick and choose in that sector as to what's got value and what doesn't."