|
Real estate has been a minefield the last three plus years as the gory remains of the real estate bubble bursting came home to roost. The federal government has done all it can to try to stabilize the market, and it seems to have worked. Those stabilizing efforts are in the process of ending and now we wait to see what will happen with the housing market. We face a simple question with the housing market. Will it continue to recover or will we see a second, harsh dip? There are reasons that can be cited to point to either outcome. The ultimate result is incredibly important. It could be the difference between an economic recovery that actually produces real jobs and a harsh dip that results in a second major shock to the economy that could produce a true depression this time. So, what positives do we see for the housing market? Well, it clearly has stabilized in most areas. On top of this, hard hit areas are starting to see construction pick up a bit, which means investment and jobs are starting to be seen. As sales start to pick up, inventory will thin out and prices will rise. In short, the engine known as the housing market will fire up and start running again. Or will it? There are a number of threats that real estate must still face. The first is interest rates. Money has never been cheaper than it is now. Loans may be hard to get because banks are shy to hand out money, but the actual cost of said money is rock bottom. Well, rates are going to go up at some point. That point is going to be sooner rather than later. The federal government has racked up huge debts. The world will only buy so much debt. Sooner or later, rates are going to have to increase to make the debt more attractive. An uptick of a point or two could be the tipping point for many people. If that happens, the market will teeter and spiral down into a second major pullback. That would be bad. So, what can we surmise will happen? Some people love the Federal Reserve Bank. Some hate it. Whatever your views, it is clear the Fed is really the force behind the effort to save the housing market. Given this, I doubt the bank would be pulling out its assistance if it didn’t think the market could survive on its own at this point. As a result, the market should remain stable, but probably isn’t going to go through any major growth spurts for some time. Thomas Ajava writes for QuestionsToAskWhenBuyingAHouse.com - where you can get free information on common questions to ask when buying a house.
Related Articles -
real estate, market, housing, house, bubble, federal reserve bank, fed, interest rates, sales, ,
|
