What Direction Do You Think The Real Estate Market Will Go Now That America Has Been Downgraded By S&P?

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Home Builder with CREST BACKYARD HOMES, ON THE LEVEL GENERAL & FACTORY BUILT HOME CONTRACTOR, TAG REAL ESTATE SALES & INVESTMENTS 521400, 1501015, 01795582

What Direction Do You Think The Real Estate Market Will Go Now That America Has Been Downgraded By S&P?

This may be a little bit of a stretch but in many ways the current state of the RE market is somewhat reminiscent  of the stock market in that the stock market factors in anticipated chaos and adjusts accordingly. 

That in part is why the big boys stay and play and the more unsophisticated investor tends to divest and run as was evidenced in the recent S&P credit downgrade that triggered the sell off we've been seeing for the last several sessions.

What is happening in the RE market is similar. The more sophisticated and cash laden investor seems to have adjusted in anticipated loss or gain in value and is buying to hold and rent/lease while the average Johnny Six Packer and Linda Lunch bucket continue to straddle the fence. 

Albeit RE is local and many areas of the Country are seeing an increase in sales the ongoing negative economic news, unemployment, political dysfunction, shadow inventory, etc.  continue to stifle the RE market overall making it less desirable for the average buyer to pull the trigger.
 
However, having said that now that America has been downgraded money will no doubt become more expensive which is likely to drive interest rates up. Folks with ARMs and HELOCs may see an upswing in their loan balances and it could even trigger concern for investors.
 
So before that happens the best thing the RE professional can do is to inform fence sitters that if they're considering buying a home to live in for at least several years that now's the time to do it. Money will no doubt be more expensive in the not to distant future and that can and probably will further exacerbate the RE recovery.
 
Just my opinion. 
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Karen Anne Stone
New Home Hunters of Fort Worth and Tarrant County - Fort Worth, TX
Fort Worth Real Estate

This is easy.  I don't think it will have any negative effect at all on our real estate markets.  Commercial markets, maybe, but not residential. 

Oct 11, 2011 04:13 AM #1
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John DL Arendsen
CREST BACKYARD HOMES, ON THE LEVEL GENERAL & FACTORY BUILT HOME CONTRACTOR, TAG REAL ESTATE SALES & INVESTMENTS - Leucadia, CA
Crest Backyard Homes "ADU" dealer & Contractor

Karen, I definitely chime in with you. The Texas market is booming compared to the San Diego market. We have an apartment building just outside Dallas and are going to be marketing it early next year. (Doing some deferred maintenance first). We flew back to interview RE brokers to handle the transaction for us. He has at least three buyers chomping their bits at the opportunity with just a pocket listing.

Oct 11, 2011 04:28 AM #2
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