The real estate market in the United States has come a long way in the last few years. Just a few years ago to be precise, the residential housing market was single-handedly driving the economic growth engine.
To the extent, the industry experts valued the US residential market at upwards of USD 20 million. Millions of homeowners got into a cycle where they would mortgage their existing homes to finance purchases of household durables or even another house.
Things came to such a point wherein the economy was no longer able to sustain the astronomical price levels at which houses were being bought and sold. The result was the bursting of the so-called housing bubble, a real estate phenomenon in which homeowners were unable to repay their mortgages and the entire market crashed.
Circa, the residential real estate market in the United States has hit a slump. Compared to the housing boom that the early 2000 era witnessed, most mortgage owners are struggling to pay their debts today. There are a whole lot of people who are ending up with foreclosures of their mortgages.
As a result of this, lending institutions have to auction off the properties of those who are defaulting on their mortgage payments. On one hand, people are losing the rights to their homes while on the other hand, it is opening up opportunities for others to buy homes at low rates.
Several factors are contributing to this slump in real estate growth in the residential sector. Some of the large lending institutions have filed for bankruptcy thus sinking with them billions of dollars’ worth of mortgage-backed securities.
This has had a ripple effect on the financial and banking sector in general since most of them have reduced exposure to the retail sector. Added to this, the employment levels have also fallen since people have lesser disposable income owing to the general economic slump brought about by the falling real estate markets.
In the backdrop of all these changes, several trends have started emerging in the US residential real estate market. A large number of people who had bought homes are desperate to sell-off. As a result, the typical real estate market that has always been a buyers’ market is now a sellers’ market. People are looking to get a decent value for their properties which, in most cases, is not happening due to lack of adequate demand. This has hurt real estate agents as well.
Those who represent clients willing to sell their properties are earning lesser commissions than those representing clients buying houses. This is because those buying houses are far less in number and the real estate market is willing to pay a premium to help them buy a house.
The good side of all these developments is the change in the affordability of houses in locations that have been traditionally considered the stronghold of the rich. As a result, the real estate market is slowing offering affordable housing in better living places, throughout the United States.