Commercial Real-estate May Collapse Soon

Image by Getty Images via Daylife

 

Due to lack of liquidity, the commercial end of real estate may be going through some rough times soon.  The lack of consumers putting funds into the sector due to understandable consumer hesitation is the main reason behind the bleak outlook.

While some areas are still looking up, others seem to be causing more and more concern.

According to Moody’s Investors Service Inc, prices were down 36 percent from a year earlier and are 44 percent below the peak in October 2007. Also, commercial property brokers Jones Lang LaSalle Inc. and Grubb & Ellis Co said that due to unemployment, office vacancies could hit 20 percent next year.

(Source)

It may take longer for the overall economy to show improvements across the board, longer in fact than the recession has even lasted.  While there is already a dim light at the end of the tunnel.

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Some Areas Experiencing Some Growth

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Canada has reported that their real estate market has continued to grow, despite the concerns elsewhere.  In total about a full 67% growth posted, when compared to the last year around the same time.  This is some good news, not only for Canada- but elsewhere as well. 

It shows that the market may finally be recovering from the harsh climate of late, and leads to new found hopes for the worldwide community that has been effected by the Recession. 

While Canada isn’t alone, there (of late) other areas posting growth as well.  This is some unexpected good news for economists, especially taken with the job market growing as well.  While seasoned employees have been finally starting to find work, it does seem to be displacing the high school and fresh out of college workforce.

Although with baited breath, some are saying that this new market may be the start of another bubble- it may just be simple fears still in the air.  We can hope that the same mistakes that have caused the present fears won’t be repeated, and unfortunately it seems that’s all we can do. 

While new laws will be going into effect soon, primarily involving the credit markets and loans, there’s no real way of knowing for a fact if they will make a difference if and when another bubble is ready to burst.

 

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RealtyRight.com Announces April as Free Loan Modification Month

For sure, there are a lot of real estate loaners in distress and for that matter, RealtyRight.com has decided to go easy and offer an indirect form of extension by announcing April as Free Loan Modification Month.

In explaining his decision to extend the offer of free complete loan modification services through the entire month, Mr. Taylor said. "With tax time bearing down on homeowners, plus the many other issues they face, especially those in need of loan modification help, we decided it would be in everyone's best interest to extend the offer to include the entire month. This way people can catch their breath a little after April 15 and still take advantage of the offer."

The offer is for more than a free consultation which, explains Taylor, is another reason for the extension. "Offers to provide free consultations are all over the place in the newspapers and Internet. We've yet to find anyone offering free, soup to nuts, loan modification representation and consultation. It's easy for a homeowner or Realtor to get confused and assume we're offering only the consultation. We want to give the totality of the offer a chance to sink in."

The April is Free Loan Modification Month offer ends midnight April 30, 2009. Realtors interested in offering free loan modifications to homeowners in their communities are invited to visit RealtyRight.com for details.




(Source) PR Web

Is Real Estate to Blame for Financial Gloom?

Read about it anywhere and it seems that the real estate business is a key reason that you will see on why we are in the economic crisis we are in today. With tons of receivables and people drowning in debt for failure to settle their monthly amortization, who can blame these big companies for filing bankruptcy or Chapter 11 due to inappropriate funds to continue operations?

Well, in the end, we only have ourselves to blame. How do we get approved loans if we are truly incapable of settling them on a monthly basis? People are witty. They forge required documents such as their gross annual income or other proof of billing and/or proof of actual income generated. This practice is done worldwide and unless there are good credit investigators commissioned to do the usual background check, chances are they will get away with it.

But most of that is in the past and now we are all in a big mess. The financial problems continue to compound our economic outlook. Will it be remedied? Well hopefully so. If not, only God knows what the future will hold for us and I am not only talking about the real estate business!

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

Renting Over Leasing

The hard times are evident and while having a home is practically everyone’s dream, you cannot help but consider the fact that renting is perhaps the cheaper alternative than the usual monthly mortgage these days.

We see mortgage rates practically double the typical rent expense we get today. The difference however is that when you lease, you are leasing to own. Renting is paying a monthly fee for shelter. But the real debate is can you handle the leasing cost over the rental cost.

Without a doubt, it would be better to lease. But consider the expenses you have to account for. Would you have enough in your pockets in the end? Such is a dilemma that people have to consider. Perhaps renting is a good alternative for the meantime that we are in crisis. It all depends on your personal budgeting and financing.

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High Cost Real Estate Markets Today

Hard times are here and apparently much has hit the real estate binge. People are apprehensive of buying property these days and much of it is because they cannot afford it.

There will be of course loan options where you can borrow a certain percentage of the whole price of the property and pay in installments. But if you are the wise pencil pushing person today, you also have to manage your finances. One non-payment will incur penalties which in turn will become additional expenses unsolicited.

You will be surprised though that some countries like London, Monaco, France, and Hong Kong could care less about the crisis besetting us today. For them it is business as usual and while the turnover of these properties may not be that fast, they are willing to wait. They believe in their work and apparently someone will come along and buy these properties. Well…hopefully that is.

Despite global economic concerns, the credit squeeze, and rising commodity prices, properties in the world's most expensive neighborhoods are still commanding ferocious premiums. While $1.5 million in Cleveland or Tampa would probably purchase a substantial house, with four bedrooms, a multicar garage, and maybe even such amenities as a swimming pool and media room, in London's Belgravia or on Manhattan's Fifth Avenue, it would buy you little more than a glorified shoebox.

(Source) Yahoo Finance