A lot of things have happened in the past year. For one, it is evident that there is a shift in global balance of economic power. Countries like the US, the UK, and Japan, which are considered as the worlds old powers are struggling if only to keep up with countries such as China and oil producing countries in the Middle East. Oil prices are at an all-time high.
The current crisis forced loan lenders to have stricter rules for new loan applications. This is the reason why first time borrowers are having a hard time applying for a loan even if they are not 'high-risk' borrowers. Not only that, the interest rates are up, making it harder for borrowers to repay their debts. Where as last year when the effect of the credit crunch has not been fully felt, lenders are doing everything to hand out cash. This year, most of them are cutting their operations while some no longer have the funds to continue. Property sellers are compelled to lower their prices if only to sell a unit. But because there is a lack of an affordable mortgage, there is an increase in unsold properties.
Up until last year (before the crisis), estate agency firms can sell more than 30 properties per three months. During the first quarter of the year, they were selling 24 properties. Now the hard part: only 14 properties are sold for the last three months. The official results may vary from different states but the downturn pattern is the same. What was once a booming business is now the crisis ground zero. The US housing is probably the worst victim of the credit crunch. First time buyers are finding it hard to own a house since interest rates are high and there are fewer lenders they can choose from. And it has been an unofficial requirement these days that if you want to buy a property, you should first deposit a minimum of 25 percent (of the property value). Or else you can just save up and wait for better days in the housing market. Also, lenders are closing in on borrowers with lots of debts whereas last year, most of them do not really care if you have a withstanding debt for as long as you can meet the terms of the current loan contract. So those who are planning to buy a house these days should first make sure that they do not have outstanding debts, or else they are more likely to see doors shutting down on them.
These days, owning a house is proving to be a tough challenge for families , however down the prices are. Even if they wanted to save so that it will be easier for them to own a house, the rising cost of living in America thwarts them. And experts believe that before things get better in the housing market, it will still turn for the worst. So it is advisable for buyers and even sellers to put off any transaction until the dust settles. But for how long can they wait? No one really knows.
David Jackson has been involved in providing essential information and powerful tools that will help individuals in their requests for your Real Estate needs. This can be found at realestatedavidjacksonbiz.blogspot.com realestatedavidjacksonbiz.blogspot.com
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