The US real estate market is slowing down. Higher interest rates at 4.75% are dragging real estate sales, as first time home buyers and real estate investors alike are not purchasing at a rate that would stimulate an otherwise seemingly solid economy.
Perhaps most telling is that those real estate investors who “fix-and-flip” real estate are sitting on the sidelines as home-price appreciation has slowed but houses remain expensive enough that it is hard to squeeze out a profit. In fact, according to the Wall Street Journal, the number of new home loans issued with terms of three years or less, typically used by investors looking to make a quick profit, dropped by 11% in the July-to-September period from a year earlier.
“The home flippers are a good barometer of where the market is heading,” said Daren Blomquist, senior vice president at Attom Data Solutions, a real-estate data firm,. “They are involved in such high and quick turnover of properties that they are hyper aware of market conditions.”
So, does the sluggish real-estate speculation market, an indicator of a healthy housing market, predict another financial crisis? Will there be a housing crash? While the current decline does not necessarily suggest a housing crash like in 2008, there is a slowdown in the housing market.
Interestingly, instead of investing in fixing and selling homes, more and more real estate investors are looking to buy and rent long term residential properties.
What does this mean for the residential real estate values? Time will only tell. Hopefully, the Federal Reserve will put the brakes on continuing to raise interest rates. If real estate is a true barometer of the health of our overall economy, then change is in the air.
From the trenches,
2500 Weston Rd #404,
Fort Lauderdale, FL 33331
Original Source: https://southfloridalawblog.com/real-estate-and-the-economy-turbulent-waters/
Roy Oppenheim is a sought-after legal expert on issues relating to real estate. In 2009, he started the South Florida Law Blog to address the real estate market and foreclosure crisis. The Blog has been voted the best business and technology blog by the South Florida Sun-Sentinel. Mr. Oppenheim has been a contributor to Yahoo! Homes, featured on HuffPost Live, FOX News, and Lifetime TV, and quoted in prominent national publications, including USA Today, The New York Times and Huffington Post. Most recently, Mr. Oppenheim hosted an Ask Me Anything on Real Estate on Reddit. Mr. Oppenheim has also co-authored two law review articles: Deconstructing The Black Magic of Securitized Trusts, and The Emperor’s New Clothes.
Mr. Oppenheim founded Oppenheim Law, one of South Florida’s leading boutique law firms in Fort Lauderdale, Florida in 1989 with his wife Ellen Pilelsky, and, in 1994, he co-founded Weston Title & Escrow, a trusted South Florida real estate title company whose multilingual staff provides personal, concierge style service in the areas of real estate closings, title insurance, title searches and escrow services.
Weston Title: https://westontitle.com/