Predictions for Residential and Commercial Real Estate
January 25, 2009
Take plummeting house prices, mix in an unprecedented number of foreclosure and short sales, sprinkle in a more restricted ability to obtain loans and then combine all of that with a weakening economy and you have a recipe that has made 2008 one of the worst real estate years on record.
Unfortunately, the sentiment out on the street is that 2008 may have been only an appetizer for 2009. The Wall Street Journal recently put together an article that sheds light on what might be coming down the pipeline for both residential and commercial real estate. Here are some of the highlights:
Residential
- Some experts predict that trouble in the residential real estate sector is expected to continue.
- Many are urging the Obama administration to push for broad programs to limit foreclosures, stimulate demand for homes, and stop the slide in prices.
- The Treasury Department is considering a plan that would push down rates on home mortgages to 4.5%.
- House prices fell 23% from their July 2006 peak to October 2008 (according to the S&P/Case-Shiller Home Price index).
- One in 10 homeowners with a mortgage is either in foreclosure or delinquent on payments (according to the Mortgage Bankers Association).
- Residential-mortgage originations fell to $300 billion in the third quarter. This represents a 50% drop from a year earlier (according to Inside Mortgage Finance).
Commercial
- Some experts predict that problems for the commercial real estate market are just beginning –office buildings, hotels, shopping malls and other commercial properties will be impacted.
- Commercial developers are hoping for a lifeline from Washington. They are hoping that new commercial mortgages will be guaranteed.
- A lack of credit has made it very difficult to purchase large buildings. In the office market, for instance, only $1 billion of deals on fewer than 50 properties closed across the U.S. in November. That represents a 90% drop from November 2007 (according to research firm Real Capital Analytics).
Comments
Got something to say?
Everyday, struggling homeowners call foreclosure and loan mitigation hotlines for help on how to save their homes. This is just a small sample of a larger problem. Foreclosures, short sales, adjustable mortgages, and financial or personal hardship have wreaked havoc in the marketplace. The need for loan mitigation is paramount.
At Loan Mitigation Advocatessm, we encourage homeowners to try and resolve their situation themselves. In many cases, the homeowner realizes the complexity of the situation and that they do not have the time, connections within the lending industry or negotiation power. This is where many homeowners turn to a loan mitigation advocate. The hiring of a specialist to handle the process from start to finish can ease an already stressed situation, reaping benefits long into the future, and most importantly, help you, the homeowner, stay in your home.
CORPORATE BROKER’S LICENSE #01858172