eal Estate markets all
over America are making the Realtors report land sales have
transition from a sellers nearly ceased to exist in many
market to a buyers market, making parts of the nation, including
many economists contend a Florida, California, Texas and
national real estate depreciation New York, the nation’s most
is forthcoming. populated states.
There are still isolated markets Lenders are already bracing for
that are strongly appreciating, change. Many have tightened
but they are the exception after guidelines, according to
15 interest rate hikes from the Economist Jon Capricorn, who says
Federal Reserve Bank, a series of land has been the most rapidly
hurricanes to hit Florida and appreciating real estate
Louisiana and weakening state commodity over the past two
economies in Indiana, Ohio and years. “A lot of people are going
Michigan. Foreclosure rates are to be left holding the bag,” said
already reported to be up 68 Capricorn. “Many people who
percent in those three states. bought land as an investment are
not even going to come close to
The National real estate market getting what they paid for it.”
is changing. Some liken it to the
days of 1989 when the real estate Capricorn isn’t alone. Real
foreclosure rate hit all time Estate consultant Jack Winston
record highs, but that was due to warns that Miami, Florida is
the national Savings and Loan going to be the epicenter for
Crisis caused by federal failing real estate markets.
deregulation in banking and the “It’s going to be severe in Miami
resulting massive fraud by and it’s going to be problematic
lenders. in West Palm (Beach, Florida).
We’ve built too many units has been a real estate consultant
(condominiums) compared to the for more than 30 years. However,
projections for real users.” Sterner says it’s always a good
time to invest in real estate.
Winston believes the banking “Just make sure you get into the
industry already realizes the property you’re buying at the
severity of the situation in right price. You make your money
Miami. Some lenders have going in.”
withdrawn financing on major
projects and others are waiting Nationally real estate cycles
to see what the market does. roll in 7 to 10 years, and
judging from historical cycles
Some 81,000 condominium units this is just another part of the
were in the construction, wave.
planning or development stages
prior to the markets turn. Now The U.S. Censes Bureau forecasts
funding for more than 15,000 California, Florida and Texas
units has been either cancelled will house 47% of the nation’s
or delayed. population by 2030 as more and
more people flock to warmer
Ironically, rates have been at climates. Economists agree that
their lowest levels in history at least the real estate markets
for nearly seven years. Another in those three states will remain
economist, Henry Fishkind, warns strong over the long haul.
investors to be cautious.
“It’s all part of the nation’s
“When the mass mentality says we changing patterns,” said Sterner.
can make a $100,000 over night “The interest rates will go up
you know it’s too late,” adds and down and things will slow
David Sterner, an economist who down for a while. But nearly 40%
of the national economy is now fast again. It’s just a matter of
dependent on real estate. It time.”
won’t be long before things are
About the Author:
Mike Colpitts is the founder of Real Estate Add, an information driven website dedicated to providing information on the nation’s 50 States real estate markets. Visit http://www.realestateadd.com for the latest on real estate market information.
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Mike Colpitts
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