Jun 14

US Real Estate to Fall Further by as Much as 50%

Real estate experts in the US predict that the substantial slump in the market will continue, maybe even as much as 50%. The cities that were hardest hit as of May 31 this year were Sacramento (35%), Cape Coral, Fla. (35%), Palm Beach, Fla. (32%), Riverside, CA. (29%), and San Diego (26%). With the steep decline, bargain-hunters are bracing themselves for further drops, ready to pounce any moment.

The price drops are inevitable with buyers waiting in the sidelines, afraid to overpay and incur losses. This translates to further price reductions. Moreover, the rise in unemployment also contributes as more people are unable to purchase homes while more are even selling theirs. In Miami, unemployment rose by 34.3% and in California, where many jobs were housing-related, unemployment was even more disastrous. Thus, it has been the cities in Central California that had the highest foreclosures within the period. The rise in foreclosures further leads to the depression on prices.

The only bright side to this scenario is that homes are now more affordable. But then again, it depends on which side of the fence you are looking at. For those who have lost their job or might lose theirs, there is on bright side to anything. While those with deep pockets may consider it the perfect time to invest in real estate, there is concern that the situation could remain at this stage for years. The only question for them now is, buy now or buy later? Most are waiting just before the fat lady starts to sing. Then again, anticipating when that will be difficult. I would just use the magic 8-ball if I were them.

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