Experts in Real Estate are seeing warning signs based on the Real Estate Market that the US could be headed for another recession. While Real Estate rates have been climbing since 2009, the rates have now leveled off in some markets and prices in other markets have been falling.
Experts also point to rising interest rates stating that are at an all time high a sign that the prices have peaked. They also point to the fact that both demand and prices are depressed due to slow income growth and rising mortgage prices.
What these experts seem to fail to take into account is the fact that there are still over a million Americans underwater from the last housing burst. Many of these people will never be able to purchase a home again.
In addition, we also could be seeing evidence that people are smarter than they were prior to 2008 and are simply not buying homes, until they can afford them. The slow income growth cited by experts, could simply means that buying a house right now, may be beyond many people's means at the current time.
Considering these things it seems only somewhat natural that housing price would be leveling out and even declining in some markets in order to lure more people into buying homes. It is A simple case of supply and demand. The Real Estate markets that saw the highest home prices were those areas where the demand for homes were high and the availability of home were in short supply.
But what do these indicators mean for the Miami Real Estate Market where the market is sluggish and there is an oversupply of available homes?
Inventive Real Estate Strategies are Needed
The fact is, in order to build a healthy Real Estate market in Miami and across the country is to engage some inventive Real Estate Strategies. Lowering interest rates might be a first step, making it more possible for local buyers to be able to afford to buy a home and actually pay the mortgage.
Miami also holds a strong appeal for people from other countries, who are looking to buy vacation homes in the United States. Real Estate Companies need to consider targeting more foreign buyers to help the Miami Real Estate gain traction.
While there are certainly indications that the housing market may indeed affect the overall economy within the next few years, there are things that can be done to avert such a thing from happening. Pricing homes out of the reach of prospective buyers, demanding high interest rates, and hoping that people live beyond their means in order to purchase property is actually what lead to the last housing crisis and aiding the great recession of 2008.
Prospective home buyers tend to wiser now than they were ten years ago and are simply not going to be lured into buying homes they can't afford and are likely to lose. While this may seem like a negative indicator that a recession is on the way, it more likely an indicator that most people today are trying to avoid their own personal recession by living within their means, even when those means are limited. It really is a case of the supply of housing needing to adjust to what buyers are demanding.
For more on the state of the existing Miami Housing Market contact me or give me a call at 305-968-8397. I am happy to discuss the existing trends and how you can put them to your advantage.