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Financial Roadblocks In Real Estate

Conditions Proving To Be Financial Roadblocks In Real Estate Market

The commercial real estate market has still not been able to improve much with the financial roadblocks affecting the market. So if you take out a mortgage for investing in a real estate property, just calculate “how much can I afford to spend on a house” with the help of a calculator. This way you’ll know the exact amount you need to take out so that you can pay back in the given time.alt="financial roadblocks"

Financial Roadblocks – Conditions Affecting Real Estate Construction

The financial condition is not improved much either and so one of the leading construction companies had to cancel constructing three of its buildings due to financing roadblocks impeding the owners. The Economic conditions are not very healthy and the owner of the company has more faith on the market shares rather than on the economic conditions. The real estate property construction had dropped in September from what it was in August. The decline was 32% which was a lot. The government built infrastructure such as street lights, roads as well as commercial home buildings also faced financial roadblocks in this economic condition. The real estate construction saw weak activity in 2010 and is hoping to gain momentum in 2011.

Other Reasons For Financial Roadblocks Contributing To The Decline In Real Estate Investment

There are several other reasons for the heavy decline and financial roadblocks in real estate investment in US. Apart from recession and financial conditions, job growth and lending also add alt="financial roadblocks"to the woes. Economic growth without job growth is completely impossible. They are directly related with each other and since the recession has taken a toll over the economy of the country, more and more people are finding themselves jobless. The debt of the country is also not reducing and for that reason people are not able to invest in real estate property thus creating even more financial roadblocks. There are also a lot of foreclosure cases piled up as people are unable to pay back their mortgage. The refinance mortgage rates are quite low but still investing in a property takes up a lot of capital.

Most of the homeowners are underwater which means that the sale price or current value of the property is much less than what they owe on the property. The prices of the houses and properties have gone down due to the economic conditions but the home owners are not able to sell them off in the market as people are unable to afford them. Further financial roadblocks show up in the vacancy rate of commercial property which has gone up from 8% to 18%.  Yet another financial roadblock in the commercial real estate market is rent – the rents have gone down as much as 40% for commercial properties and 33% for offices. This reduction has had a negative impact on the value of the commercial properties and one more financial roadblock for investors.

Positive Streak In Financial Roadblocks Negative Scenario

Even when the real estate investment and housing market is suffering, due to the decreased mortgage rates, more and more people are taking out mortgages for their homes. The homeowners are trying to build equity on their existing homes by making use of the lower rates of the refinance mortgage. The home purchasing may reduce 8.5% but the rate of application for refinance mortgage rose from 78.9% to 83.1% in week.

In spite of the falling economic conditions, if you want to purchase a home, read about the local market conditions. If you want to take advantage of the lower refinance mortgages, get help with: “how much can I afford to spend on a house”. Don’t let financial roadblocks stand in your way of effectively using the real estate market as an investment or equity building opportunity.

About the author

Sherry Fields Sherry Fields has been working in real estate since 2002. Working with the development team for the Hilton Garden Inn gave her strategic information on the commercial real estate market in Missoula. Broadening her scope she moved into the residential market and earned the designation SFR in short sales and foreclosures. Currently affiliated with Prudential Montana Real Estate, she works with both buyers and sellers "building relationships so you can buy & sell with confidence". Sherry Fields has recently earned the CREN designation - Certified Real Estate Negotiator. While price is a large part of negotiation - it is also about timing everything from the closing date to inspections, appraisals, home insurance - and it is about negotiating items that can show up in home inspections to achieve a mutually acceptable outcome.

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