The Housing Market Today and Tomorrow
We all know that there are ups and down in all industries, the housing market has had its fair share of down times. Today is one of those down times, possibly one of the worst the hosing market has ever seen; especially when you take into consideration the shape of our down economy. All over the country we are seeing double-digit deflation, with California quite possibly being hit the hardest. California, over the past year has experienced the most deflating homes, with home pricing dropping well below where the market has ever seen them before.
Taking another look around the country we see that another area hit really hard is Miami, Florida, with a struggling mortgage market and their extremely high foreclosure rate leading to home values dropping to record lows; some are beginning to wonder if we will ever dig out of this hole. Over the last two years Miami has suffered, being one of the worst cities in this housing crisis. Also contributing to their woes was the condo boom just a few years ago, they are now spiraling downward into a massive bust of their real estate market.
It is easy to understand why states like California and Florida are early predictors of a housing market crash, with their exurbanite home prices, their local housing market can’t afford such prices in a down economy, hence why they are often times the first to struggle. But this current crisis hasn’t just hit big cities hard, it has had an overwhelming sweeping effect on the whole country, with some of the highest foreclosure rates we’ve even seen in the country.
Layoffs in many states across the country, some states seeing record highs of unemployment going into the double-digits, are another contributing factor to the down housing markets. With people not being able to pay their mortgage and having their homes foreclosed on, it isn’t possible for the housing market to do anything but fall.
With no end in sight, problems around the country are only expected to get worse. There will be a reset of millions of adjustable rate mortgages in the next few months, which will continue to worsen the problem at hand. It is logical to assume that as these rates reset we will see even more homeowners struggling to make their mortgage payments, once more leading to higher rates of foreclosure, or causing a lot of home owners to be forced into short sales, losing tons of money on their home investment. Homeowners don’t even have the option to refinance right now due to the bank’s money woes, with a lot of them folding as well.
So what can homeowners do to protect themselves? Start by curbing your expenditures, cut the fat, meaning cut out that which you do not need and instead set money aside now. You may have a stable job now, but in this economy even the most stable of positions is at risk. You want to sock away enough money to live off of for at least 6 months, it is taking longer and longer to find a suitable job, and often you will be forced to take a pay cut. The good news is that all things come to an end, so just like the great depression, we too will see the light of a new and vibrant economy and housing market.
Protecting Yourself Against Downturns in Your Local Real Estate Market ….
to be continued….
