What data have you found and do they support that a collapse in the real estate market is approaching and what is the data reversing?
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- The economic crisis of 2008, was one of the most decisive and influential factors in the American real estate market since they began collecting data on it somewhere in the early 20th century.
Today, in 2019, after the market has been on the rise for almost a decade, many are wondering whether we are ahead of the next fall.
Just a few months ago we saw new falls in the stock market that signaled the end of a continuous period of increases in the capital market… Real estate investors look around the corner and wonder how long the current continuum will continue, and do we also have something to worry about?
The 2008 crisis, also called by the sub-prime crisis, is because mortgages were sold between banks and private lenders at prices that were lower than prime interest at the time.
They knew that even if the lender was insolvent, they would still be able to group the loan together with a package of other loans and roll them into another lender.
And of course, the fall, looking back, was inevitable.
But are we facing a crisis on a scale we have yet to hear?
Jim Rogers - a famous American investor who leads his own investment school - talked a lot recently about the expected stock market crisis, but did not specify the real estate market as a victim of the crisis.
Warren Buffett - If you compare the day to the pre-crisis period, it more than doubled the amount of Berkshire Hathaway's investments in the real estate market, after making a decision, a few months ago, to sell a significant portion of their holdings in the capital market.
And therefore, despite a number of similar characteristics, between the current period, and the pre-crisis period, in 2005. Here are before you 5 reasons why the crisis, if imported, will not come soon:
1) There are many differences in the real estate market, as it is today, compared with what was in the period before the crisis. The quality of the borrowers has increased significantly - people who are approved for mortgages are in the 3 decile today, compared with the 2005 year in which the borrower
The average was in the 7 decile
Banks have learned the lesson, and have toughened the standards for obtaining mortgages. In 2, total high-risk loans accounted for 2005 of the total mortgage market, while today the percentage is closer to 20%.
3 Banks do not allow borrowers to use them to leverage 100% of the deal, as was sometimes the case prior to the crisis. And they limit their involvement in funding.
4) The number of homes sold today is still lower by 20% than it was at 2007
5) The amount of loan that people take against their homes is significantly lower. And the total equity of Americans is higher by 40% than in the same period.If so, when will the crisis come?
According to a study from Harvard University, the forecast for the next crisis will come somewhere in 2026.
- Finally a normal reaction.
What I keep saying.post Scriptum
What was at the end of 2018 was normal declines. - According to the field data, it can be said that there is a change in the real estate market. We are once again facing an election that it looks like Trump will re-elect.
This is what will cause the banks to leave low interest rate and try to wake up buyers by various means. For example first time buyers will receive up to 10 a thousand in favor of buying
There are mortgages with 3 percentage without insurance
There is a huge amount of money from investors who are still looking for the next market. Many big cities have not yet had the last word - It is important to add
The real estate market is in a much healthier place in terms of loans and leverage much because a large percentage of purchases in recent years have been made in cash.
In addition it is important to remember that after the crisis a huge number of assets were taken from the market which created a low supply and took banks years to release their inventory back to the market, all while the US population continues to grow.
So some of the price hikes we saw in recent years stemmed from a drop in the bid and an increase in demand, which the low prices only helped. - Udi Zecharia
- Chen Lerner Mor Amira
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