Tips And Simple Facts About The Real Estate Market

For half of a decade, the real estate market has been getting hammered. Prices hit their peak and began to decline in 2006. The subprime lending market reached a crisis in 2008 due to the rapid increase in foreclosure rates in 2006 and 2007. It is quite possible that the market has not yet hit bottom. Foreclosure rates have slowed, but linger. And with supply levels high and demand for housing low, experts agree that the decline in the housing market may continue for several more years.

Homes on the market now are selling at about 95% of their initial listing prices. This shows that sellers and buyers are adjusting to the new economic realities in real estate. Property agents and home sellers are listing the homes now at a price much closer to what the housing situation is willing to bear. Buyers have also learned that, with more realistic prices, there are fewer opportunities or reasons to low ball in contract negotiations with sellers.

Many experts believe that the national housing crisis was really a series of local crises instead. The former Federal Reserve Chairman Alas Greenspan believes that the crisis was caused by the bursting of several local real estate bubbles, not a national bubble. And some parts of the US were definitely scorched worse than others. Recent devastating problems with the US auto industry have decimated the markets in Detroit and Grand Rapids, MI. Las Vegas and Reno, whose economies rely on tourism and gambling, have also taken a severe downturn. South Florida was hit particularly hard. And California, with its myriad of economic problems, has also been particularly hard hit.

More rural parts of the country are doing much better. With its low unemployment and low cost of living, North Dakota housing is doing rather well. States like Iowa and New Hampshire are also weathering the property storm in much better shape than the rest of the country.

Several reasons have been given for the nations real estate woes. Many believe the problems had their genesis in the banking deregulation that occurred in the 1980s. The Gramm Leach Bliley Act of 1999, which allowed for the merging of investment and commercial banks, has also been given much blame. This act helped to create the adjustable-rate mortgage products that contributed so greatly to the crisis.

According to Moodys, a credit rating agency, commercial property investment is stabilizing due to an increased demand for apartment housing. And reports from south Florida, also hit hard by the down turn in the economy, are that the market might be improving with the help of foreign investors. Rich investors from South and Central America, Canada, and Europe are bringing cash to south Florida in anticipation of picking up some very good investments at a time when prices are perceived to be bottoming out.

With interest rates for 30 year fixed mortgages dropping below 5%, there is some reason to be optimistic about the future. However, the property situation is still poisoned with many bad loans, and the rate of foreclosures on these loans might not yet be ready to ease up.

Anybody entering the real estate market now should do so cautiously. Pick your spots, and take advantage of low rates, and you might yet find a great deal, even now.

By: Todd McCauley

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Prospective home buyers, check out our site to learn everything there is to know about the Boise real estate market, now. You can also find information about a real estate broker who specializes in Boise homes, today.