Canada, NZ and UK have a real estate crisis too!

By
Real Estate Broker/Owner with Turn-Key Properties LLC, Missouri and Kansas Real Estate

What the news on ABC, NBC, CBS, CNN, PMSNBC and the other all Barrack, all the time channels is not telling you; is that American real estate is not the only market in a crunch.

The Canadian real estate market has hit new lows, New Zealand real estate market is tumbling, The UK has its own real estate crisis.

I've posted a few links, the reality is the real estate crunch is hitting the globe, speculators overbuilt, buyers over-leveraged and population growth has not kept pace with housing growth.

While the American news media is blaming George Bush for the real estate woes of America, the rest of the world is feeling the backlash of a real estate market gone soft.

While CNN and the rest of the media tries to blame America's mortgage problems on the president, many fail to remember the praise they gave him when the home ownership rate in America reached an all time high of 70% in 2004!

According to the New York Times, of all places, "Tax incentives to borrow and invest certainly work - look at the tax deduction for mortgage interest, which has helped push home ownership up to about 70 percent of American households, a record high".

What's more; home ownership among minorities hit an all time high under the Bush administrations policies. So what went wrong? Sub-prime mortgages, graduated payment schedules and mortgages to people who simply had no business getting a loan.

While Sharpton, Cleaver and Jackson cry fowl, the reality is that many people who got loans simply had no record of payment history that would support the credit they were given.

Millions of loans were made on stated income, meaning the borrower only had to make up a number summarizing income and sign on the dotted line.

Most of those loans were made with adjustable rate mortgages and the borrower was simply too naive to understand the consequences. The problem is epidemic, but it is not political.

While the market was over-inflated it led to over-building that led to too many houses and too few buyers.

Now we are in for a correction, there has never been a better time to buy, while it is getting more difficult to get a mortgage, that means that more people will have to rent. People who are facing foreclosure will have to rent for many more years. This is a great time for real estate investment, but you will need cash, equity or great credit.

Ultimately the reality is that tax policy and government can make it easier to get a mortgage, they cannot make you pay your bills.

 

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Tags:
canada
subprime
george bush
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uk
usa
real estate crisis
mortgage crisis
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Rainer
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Justin Ukaoma
Vizion KC - Kansas City, MO
Kansas City Real Estate Investments

Great Post Ben.  I agree that for the time being a lot people will need to rent.  Infact just last week we started advertising several of our properties as both rent and rent to own.  It's gotten tougher to get a mortgage but people have to live somewhere.  We might even be looking at getting an apartment building. Thanks for sharing.

Aug 31, 2008 12:31 AM #1
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Rainmaker
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Ben Edsall

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