US property market taking new hits
|Sunday, 12 October 2008|
As European leaders meet in Paris today to try save the continent's banking system there is concern that not enough is being done in the US where the credit crunch originated.
The fate of one of the strongest property markets in the world hangs in the balance as Wall Street stalwarts crumble and job losses loom over the Big Apple.
The property sector in New York is now described as being static. New development has been scaled back because no lender is willing to finance even the most sure-thing projects.
One of the biggest concerns is the effect of job losses in a city that is highly dependant on the financial services industry which accounts for nearly a third of all income and 12% of employment. 'It doesn't look pretty,' said Barry Gosin, chief executive of commercial real estate services firm Newmark Knight Frank. 'The question is how many jobs?'
In other parts of the US it is feared it could take years for the property market to recover. In California, which has been badly hit by the sub prime crisis, most people don't think the bottom has been reached yet.
'We'll probably be at that bottom level for quite a while before it makes an upward turn. In terms of the California real estate market, it will take a long time, possibly up to decade if the last real estate recession in southern California in the 1990s is any indication. It was a very, very long process,' said one commentator.
However areas could recover quickly according to Jim Luccisano, founder and president of Edison Financial Services, a financial services, mortgage, insurance and real estate firm in south Fort Myers, Florida, which has also been badly affected by the downturn.
'I think that areas that have been hit the hardest will rebound quicker. Also single family house will bounce back quicker,' he said.
The latest foreclosure figures show that Nevada has experienced the most foreclosures so far this year followed by Arizona and then Florida. But for the third quarter of the year California posted most posting, followed by Arizona and then Florida.
Nationwide, foreclosures remain on track to post more than a million by the end of the year and pre-foreclosures should end up at a record two million, the report from foreclosure.com said.
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