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The Crash of the Housing Market

      It is an interesting housing market we’re currently in. Nearly everywhere in the United States is experiencing pricing declines, from California Condos to Homes for Sale in Arlington Texas . Real Estate quantities are at historic highs, and the rate of loan delinquency is out of control.

The reason we’re seeing these dramatic market conditions is because mortgage regulations became too lenient. Buyers who shouldn’t have qualified for loans, were now qualified. Another factor that promoted to the real estate mess was that interest rates dropped to historic lows and people could now buy a lot more home for the same monthly payment. More Americans were able to purchase real estate, and demand for real estate skyrocketed. Supply didn’t keep pace with the number of new buyers, and real estate values skyrocketed Real Estate became unaffordable, and more alternative loan terms were created to help more people who couldn’t afford mortgages, to temporarily afford homes.

Meanwhile, all the increase in prices spurred real estate investor speculation than ever before. Some cities saw more than 50% of the homes being bought by investors. They bought the homes and then immediately resold them for huge profits because the values were rising so quickly. Overall the economy boomed, home owners borrowed against their increased home values, indulged, and all was well. But the problem was that this housing boom was created by unreal, irregular forces. Real Estate wasn’t purchased out of necessity, they bought them as investments.

It all ended. Real Estate became too unaffordable and house sales dropped. The economy stalled, and people couldn’t afford payments on the homes they never should have purchased.  Then the overallThe credit market crumbled. The economy slowed, and government has intervened to compensate for the effects that loose regulations wrought.

The Feds efforts to stop a recession have put the market in a situation where interest rates are once again unrealistically low, but it doesn’t seem to make much of a difference because Americans fear buying homes right now, and because it’s so much more difficult to get mortgage financing as it used to be.

The number of homes for sale is up, and there is more homes for sale than imaginable. For some areas the real estate decline is over They’ve bottomed out. Inventory is beginning to decline, and real estate values will rise once more.

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.

**************************************************************************** © 2016 BHH Affiliates, LLC. Real Estate Brokerage Services are offered through the network member franchisees of BHH Affiliates, LLC. Most franchisees are independently owned and operated. Berkshire Hathaway HomeServices and the Berkshire Hathaway HomeServices symbol are registered service marks of HomeServices of America, Inc ®. Equal Housing Opportunity. Privacy Policy Sherry Fields 1020 South Ave. W., Missoula, MT 59801 | Phone: (406) 207-8448 | Email: Sherry.Fields@bhhsmt.com *******************************************************************************



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