Friday, July 11, 2008

Real Estate Falling Due to Stricter Borrowing Requirements

It was bound to happen. With world economy on the downturn, the apprehensive approval that most financial institutions and lenders provide for people wanting to invest in real estate has evidently become tighter. So as far as this trend is concerned, the real victim would be the real estate developers who seem to be in for an uncertain future as far as closing deals mostly based on financial structures through real estate loans and money borrowing.

This should not come to a surprise. Even in the other business sectors today, we see these financial capacity to pay as a main obstacle towards doing business. In short, most businesses are being careful on their collections and accounts receivables since the need to increase the allowance for bad debts of these companies is not a good sign for corporate operations.

On the real estate side, people have nothing to lose. They can still earn up and get that eventual dream home in the end. Apparently the only loss they have is the time element. For the real estate binge, it is about looking at investments simply lying there until the economy improves for the better.

(Source) Yahoo Finance