Santa Clarita Living

The real estate market and the crisis

by admin on 18/04/09 at 12:41 pm

As stated by many experts in the field, the housing market begins to be in crisis and have the first signs of slowing.
The report was produced by Nomisma and highlights some key data:

Price recorded the first decline of the last 11 years (-1%) even if compared to other countries like the U.S. (-16%) and Britain (-15%). But the most worrying concerns the solvency of the market.
Borrowers increasingly insolvent
According to the report of the property Nomisma in 2008 on the suffering loan will be in about 7 billion on residential market from 120 billion (5.5%). The ascent is clear: in 2006 the suffering amounted to 3.9 billion in the first half of 2007 had already increased to 4.6 billion to end 2007 at 5.1 billion and 5.6 billion still to June 30 2008.
In the second quarter of 2008, the contraction of credit given is of 7.9% -10.1% that is if we consider only those homes. Throughout the first half of this year is down 5.3%. A quarter of the current disbursements of loans are for replacement value in that account for 13% delivery of (3.76 billion over 29).
Market decline of 14%. Prices decreasing slightly (-1%)
In the first half of 2008, sales have decreased by 14 percent. By the end of the year the industry loses 24 billion turnovers. These means 160 thousand houses sold in less (-20%). A return to the levels in 2000-2001. The prices in the first six months of 2008 fell for the first time in 11 years, although in a low (-1%) compared to the rest of the world (-16% in the United States, -15% in England).

The data clearly describe a moment of economic crisis.
Money is finite and the Italians do not have the opportunity to purchase home and borrowing.
Furthermore, all have understood the negative period in loans; few people dare to bear so heavy a debt, knowing the consequences to which they meet.
Finally there is the deflation in the housing market, which consequently slows down the process.
If the house is now 100, I am sure tomorrow will cost 90, then wait 90, but after so that will wait 80 more, triggering a dangerous vicious circle that could cause further damage to the country.
Surely the price will bring more purchases over time in the housing market, but we must await the return of the Break Even Point, or the balance between demand and supply.