The Wall Street Journal reported that Elizabeth Duke urged bold moves for real estate meant to revive the housing market. Elizabeth Duke is a high ranking official with the Federal Reserve. In her speech last Thursday Duke stated "Clearly the real estate market is not functioning as it should.” The speech was in recognition of a national real estate market slump due to the economical recession that has hit nearly every part of the American dream.
While the market in Miami has felt the recession, the real estate market in Miami has been relatively steady with stabilization occurring in many areas. There has been renewed interest in property purchases. And while much of the country has struggled in the real estate market, South Florida has seen the rise of new development projects within the Miami real estate market.
Basic economics suggests that low interest rates entice consumers to initiate major purchases, such as buying a house. While interest rates are not at the lowest they've ever been, currently interest rates are near the all-time low. Although the interest rates are historically connected to a booming housing market, the current statistical data does not supports correlation. In many parts of the nation, the number of people buying a new home is still very low compared to the interest rate data.
Financial experts suggest that one cause for real estate troubles can be found within the credit market, although it is by far the only cause for the recession within the industry. Fewer banks are offering favorable credit terms; and it is become more difficult for consumers to gain mortgage approval without a nearly spotless credit record. Another cause for real estate difficulties is the number of foreclosures flooding the market. In fact, Miami foreclosure properties continue to come into the market at a steady pace.
In an attempt to stimulate the housing market, new ideas are being evaluated the policymakers. Leaders such as Duke are beginning to creative with ideas for the real estate market in Miami and nationwide. This is in addition to the government supported mortgage firms Freddie Mac and Fannie Mae. These 2 institutions offer refinancing opportunities for homeowners which are owned and operated by the government.
Duke proposed one solution for foreclosure properties in particular. She suggests that the Miami foreclosure properties be used as Miami rental properties. Her suggestion is sound as it will provide individuals and families who could not otherwise afford a single-family property to lease a space large enough for their needs, offering an alternative to condo and apartment living. Dukes suggestions won't completely eradicate the real estate market slump, but the innovative and creative approach offer some success to lessen the strain the market is experiencing currently.
As conversation swirls around the state of the national real estate market, many South Floridians wonder what the changes will do their market in particular. Loosening the grip on mortgage approvals will give rise to opportunity for potential buyers, individuals, families, investors to capitalize on the available properties currently on the market, many of which are priced below market value.
For investors seeking real estate market in Miami rental properties, reduced interest rates are equivalent to greater monthly rental income spread. In short, property owners can expect a higher yield on their investment.
Add new comment