Banks Giving No Leeway, US Real Estate Market Continues to Crumble Leaving No Way Out RealtyPartner
May 23, 2011 (PRLEAP.COM) Business NewsMany people assume that the real estate crisis in the US is over just because it is no longer considered newsworthy. For many people, though, the situation is far from settled. Real estate prices have, as we all know, dropped considerably in the last 5 years, but, more surprisingly, this has not lead to an increase in the number of families able to buy their own homes.
The fact that many families, whose earnings have been adversely affected by the recent financial crisis, can no longer afford to own real estate is of grave concern for all those involved in the sector. As demand continues to stagnate (or even drop in some areas), house prices will continue to fall until we see a recovery in other parts of the economy. The problem is that the rest of the economy is partly driven by the real estate market, leaving the US economy in a Catch 22.
Trust in the housing market is also at an all time low with people staying clear of investing in real estate, even when they can afford to buy. Fearing negative equity in a market that is being constantly talked down, a lot of people that would otherwise be keen to get onto the property ladder have decided to rent their homes instead. A joint survey by Trulia and RealtyTrac.com in April suggested that 54% of Americans believe that a real estate recovery is at least two years away. These are, indeed, worrying times to be involved in real estate and housing professionals must be very careful to avoid making big losses in the next couple of years.
"The banks have done little to prevent this decline in the housing market. In fact, in many areas, their tough stance on foreclosures have made the situation a lot worse." -stated RealtyPartner.com's Founder, Mark Quinones.
A foreclosure or series of foreclosure can have a disastrous impact on real estate values in a particular neighborhood. The banks could have eased the situation by giving those who fall behind on their mortgage leeway, allowing them to either to catch up and keep their home or to sell up at full price without doing any damage to homes for sale prices. But we cannot trust the banks to do us any good in this day and age so we must be ready for a long, hard, dark spell in the US real estate market in the next few years.