Recessions and trade wars and deficits. Oh, my!
If you’ve read any headlines as of late, you’ve likely been bombarded with doom-and-gloom forecasts about the current economic state of the U.S.
But we’re not here to add another talking-head pundit’s opinion to the mix.
These ominous headlines do, however, beg a more real estate-focused question: How will the housing market be impacted should any – or all – of these issues come to a head?
Adding insult to injury, however, is this recent article from the Tampa Bay Times. The short-but-sweet article says …
“Bucking a national trend, the Tampa Bay area saw an increase in new foreclosure filings in the first half of the year. According to the real estate information service ATTOM Data Solutions, bay area filings jumped 18 percent compared to the same period a year earlier while filings nationally dropped 18 percent.
“Despite the increase in new foreclosure starts, Tampa Bay foreclosure activity remains at relatively low levels. Another real estate service, CoreLogic, found that 0.8 percent of all bay area homes with mortgages were in some stage of foreclosure in May compared to 1.2 percent a year earlier. And the percentage of homeowners at least 30 days late on their payments dropped from 5.8 percent in May 2018 to 3.7 percent this May.”
OOF.
While ‘… relatively low levels’ is comforting to read, it’s enough to give us pause. Not sure what to do – if anything – to protect your real estate investments should the worst come to pass?
Here we’ve rounded up some ICYMI articles from our archives so you can educate yourself and prepare now for what may – or may not – happen tomorrow.
In Case You Missed It: Housing Bubble Edition
2019 Real Estate: Bubble or Bankable?
“Real estate investments have long been associated with wealth creation – and growth – in the United States.
“In a recession, however, the value of real estate enters a gray area. For residential homeowners, the risks of a recession can prove far greater as the value of their home almost always rests squarely on the shoulders of appreciation, for which there is no guarantee.
“So this begs the question: Are we in a bubble?
“First, let’s be clear on what a bubble is: an unrealistic, unsustainable value that can’t reasonably be expected to continue. For perspective, home values in 2005 weren’t based on affordability; they were built on predatory loans that allowed people to borrow far beyond what they could afford. When those loans ballooned, nobody could pay them, and the market flooded with foreclosures.
“But today’s market is much different. Rates are generally fixed over 30 years and are based on the buyer’s income. So while prices may be higher, they’ve increased in proportion to wages so the odds of loan defaults hitting the market all at once isn’t likely.
“The bubble bottom line is this: As long as people can afford their payments – barring a recession or problems in the job market – the real estate market should be sustainable.”
Read more here.
9 Tips To Survive The Next Housing Bubble
“Listen. We don’t like thinking about it. We don’t like talking – or writing – about it. But the fact remains that like all things in life, real estate is cyclical in nature, ebbing and flowing like the tides.
“But we also believe that despite this sobering reality, an ounce of prevention is worth a pound of cure and for those that prefer to be proactive, housing bubbles don’t have to be scary.
“In fact, we’d argue they present incredible opportunities if viewed through the right lens with the right attitude, approach and – dare we say – real estate professionals at your side.
“So if you’re reading the headlines – like we all are – and want to know how to prepare, here are a few tips to do just that.”
Read more here.
Report Predicts Real Estate Cycle Is Nearing Peak
“According to the latest national index produced by Florida Atlantic University and Florida International University faculty, current market signs indicate that most U.S. housing markets are approaching a peak in the real estate cycle.
“However, their predictions say that contrary to what has happened after a peak in the past, there’s little evidence to suggest prices will plummet.
“The research faculty at Florida Atlantic University ranks 19th in the world for their intellectual contributions to the real estate industry through their publications in top real estate academic journals, according to the Journal of Real Estate Literature.
“And their report, the Beracha, Hardin & Johnson Buy vs. Rent (BH&J) Index, published quarterly two months after the end of each quarter, shows that while housing prices have been rising steadily since 2012 in most parts of the country, they’ve begun to slow.
“This slowing then suggests that the market may be nearing its peak in around the U.S., according to Ken Johnson, Ph.D., a real estate economist and one of the index’s creators in FAU’s College of Business.
“But Johnson insists that this is good news as this time around, the market is pulling back from the brink – which failed to happen when the bubble burst in 2007.”
Read more here.
At DeLeon Sheffield, we’ve seen – and survived – every real estate market ebb and flow but one thing will always remain constant: At DeLeon Sheffield Company, we’re here for you as you buy or sell a home, regardless of market conditions, every step of the way.
Because at DeLeon Sheffield Company, ‘We’re More Than Realty; We’re Family.’
