The country is looking at its worst real estate scenario in ages with a double figure deflation. The whole country is looking at a crash in the real estate prices but California seems to be the worst market. California is experiencing a never before fall in home prices, with price deflations at their nether. This unprecedented fall in prices has resulted in the highest rate of deflation in home prices ever.
Miami, Florida is another of these disaster markets. An extremely weak mortgage market and a high rate of foreclosures have led to the drastic fall in property values here. The Miami market has been seeing this trend for the last couple of years. It has been near the bottom of the real estate market lists for some time now. The condo boom that Miami saw a few years back has added to its woes and is now the reason for an colossal real estate let down.
Miami and California are both looking at an ominous collapse of the real estate market. The other markets are also moving towards it but it is not so evident. This swift downfall in the real estate markets of Florida and California is ascribed to the impractical rise in property prices that the two states witnessed during the boom period.
The fact that the other markets were not part of this boom has turned out to be their savior, and is keeping them competitive in today’s market. The markets of states like Nevada, Arizona, Indiana and Massachusetts are now looking at a steady weakening due to the high rate of foreclosures and constant fall in property values. Another state looking at poor markets due to troublesome financial conditions is Michigan where considerable number of home owners have been laid-off from jobs.
The housing markets are likely to deteriorate further in the near future as millions of mortgages are expected to come up for resetting with flexible rates. It is anticipated that specific markets will see many homeowners struggling to meet their monthly mortgage repayments, due to the reset mortgage rates. Refinancing will become increasingly non-viable and they will be forced to either short sell or opt for foreclosures.
Most of the probable major problems are expected to stay just that, probable problems, during 2008. Statistical data predict that the property values will continue seeing the red and are expected to fall by as much as 18% before the end of the current Year. The market is expected to stabilize as the year end approaches and a few months into the New Year may bring in fresh hope. Beware, do not pin your hopes to a rebound as the market is not expected to reach its previous glory. Experts are predicting that the market rebound will be marginal. The earlier unprecedented escalation of markets in
2005 is likely to prevent it.
Not all is despair in today’s poor market conditions. The current incentive package is expected to bring aid to the housing markets. This should help with the sub-prime mortgages which are currently exiting through foreclosures or by short selling of properties.
New entrants in the market, who are looking to buy their first homes will benefit from this market. The previous booming markets had excluded them from being property owners. On the other hand the current home owners are facing a tough time as they are reluctant to sell their homes at current rates and are hoping to regain their property values. The underlying fact is that most of them have not accepted that the value of their property has come down drastically and cannot regain its past glory.
Real Estate Market - What Does the Future Behold?
No comments:
Post a Comment