PRESS RELEASE
FOR IMMEDIATE RELEASE
The financial meltdown of 2007 hit many people very hard indeed, not least because of the catastrophic impact it had on the US housing market. The housing bubble of the 1990s and 2000s came to an abrupt end in the second half of last decade. Real estate prices peaked in 2006, but have been falling ever since, the main contributor being the subprime mortgage crisis in which millions of families across America defaulted on loans they never should have been given.
Since then there has been a shaky recovery with real estate markets growing at a small but real rate. This recovery has been volatile and rises in house prices have been unreliable. Despite this, most people are under the illusion that the real estate market is on its way to recovery and that another housing boom is on its way.
But that’s old news, right? Sadly, no. The real estate market continues to be far from stable as the US housing “correction” has not brought real estate price down to what they were before the housing bubble. In January of this year, house prices dropped by 3.6% from last year. This is very worrying for those in the real estate business and has led to widespread fears that the housing market has a lot further to drop. In February, economist Robert Shrill estimated that house prices in the US still have another 25% to fall. Although such a vast drop is unlikely, Shrill’s comments do represent a wort case scenario of which real estate professionals must very wary.
All this bad news means that, in 2011, everyone involved on real estate must be diligent in order to make sure that they don’t get tangled in a potentially disastrous situation. It is vital that in these uncertain times, investors and families alike are careful to protect themselves from negative equity. Particularly badly hit by the January slump was the area that include Nevada and Arizona, so these areas must be approached by investors with extreme caution.
Hopefully the real estate market can continue to recover on the back of a growing economy and falling unemployment but this is far from guaranteed and we must all be careful not to get overly optimistic. If we assume that the worst case scenario will happen, at least we will be prepared for every eventuality and, with any luck, be pleasantly surprise when the situation is better than we first feared.
MEDIA CONTACT INFORMATION:
Rebecca Randells
Realty Partner
University of California, Santa Barbara Alumni – Editorial Columnist
[email protected]
http://www.realtypartner.com
