Financial Crisis: Possible Rebound for the Housing Market

Despite the fact that the financial crisis is still marching forward, some big money analysts are saying that the housing market is set to rebound in a big way. Analyst David N. Miller has said the crisis evolved from a few different things such as easy credit, shoddy banking, feeble regulation, etc.

In a recent symposium at Columbia University Miller said, “History has demonstrated that the financial system over all — not every piece of it, but overall — is a force for good, even if it goes off track from time to time…As we’ve experienced, sometimes this system breaks down.”

In the midst of collapse, though, there is often money to be made, especially as things liquidate back into the economy. Something that is surprising consumers is that investors are leaping headlong back into the housing market. They are not just investing in construction companies and such either, but they are buying actual homes and putting them up for sale. The houses are being purchased at housing auctions, multiple listing services, short sales and bulk purchases from local investors in need of cash. In some cases they are buying the homes, fixing them up, and then renting them out. Some would say that it is a renter’s market.

Investment companies are raising billions to get back into the housing market big time, and so not only is it looking to be a renter’s market, but it could be a buyer’s market soon to. If the houses are being bought for less, then it could be that selling prices will be lower and therefore more affordable for potential buyers.

Investment group Silver Bay has said, “Recent turbulence in U.S. housing and mortgage markets has created a unique opportunity.”

There is also a fair amount of controversy about the emerging housing market because so many people lost their homes to the bubble burst, and a big part of that was due to bad monetary policy, and unethical banking practices.

Source: CNBC

Category: Finance