It is known to everybody that every corner of the world is encountering a depressing time with regards to economic status. All countries have their own share of fiscal slumps since 2007. For one, the U.S. is not an exception as economists analyze the current economic situation parallel to the Great Depression in the 1930s. A lot of industries, especially the real estate arena, have been incessantly challenged.
Every single day, reports of depressing real estate data crowd varied media. Market trends have been oscillating every now and then. There are noticeable decreases in home prices, even in the priciest neighborhoods, thousands of homes unsold and foreclosures and short sales multiply by hundreds. As of the last quarters of 2009, twenty five cities were labeled as the worst real estate markets in the nationwide poll according to Housing Predictor, a real estate data gathering company. But fortunately at the same time, some of these so-called worst markets have seen slow improvements. Some territories of California, Florida and Nevada had reports of increase in home sales.
The commercial sector of this industry suffers as well from left and right fiscal hardships. A study by the Wall Street Journal was conducted last year. It revealed that the commercial mortgage-backed security (CMBS) sector is responsible for 3.14% delinquencies only as of July last year. This data amounts to debts of banks nationwide to approximately $1.7 trillion. The study also projected that issues of delinquent payments with regards to CMBS loan will be continued to be experienced until late this year.
Another depressing occurrence due to the downward economic status was the increase in fraudulent real estate related activities. Hopeful borrowers who only wanted to seek assistance for the approval or modification of their mortgage loans became victimized by elusive financial advisors. One case in California involves three men who scammed more than two thousand elderly investors. Their securities funds were misused and manipulated. Currently, prosecution of this case is underway.
Due to these alarming situations and complaints, legislators and industry practitioners such as realtor and/or lender associations have formulated measures to instigate consumer protection against these vile activities. There are numerous bills, rules and grants signed and implemented in many states today. Two of these regulations were the Housing and Economic Recovery Act of 2008 and the revamped and re-contextualized version, the American Recovery and Reinvestment Act of 2009. Through these acts, borrowers and first time home buyers were given further assistance. The highlight of the former act authorized the Federal Housing Administration to guarantee up to $300 billion of 30 year-fixed rate mortgages. The latter covers the federal tax credit for first time home buyers. Through these measures, the industry is slowly regaining strength and the faith from some consumers.
On the other hand, some top economists and analysts criticized that these measures were not as effective as they aim to be. For one, the tax credit program was terminated too early. As only a small percentage of home buyers benefited, there is still a noticeable number of houses unsold and hopeful buyers who cannot successfully enter and close a deal.
These highlights are but a few, but the main point in all of these is that as an industry consumer, one has to stay vigilant. Before jumping into any transaction, proper timing and appropriate evaluation of the market trend pros and cons are your main tools toward being a successful investor.
Author Resource:-
Mesa Homes for Sale, Mesa, AZ Golf Course Real Estate and Mesa Luxury Homes can offer you a whole deal of information about the real estate market. Whether you want to sell your house, buy a property or rent one, getting all the information that you need will give you a great advantage.
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