Residential Real Estate Trickles While Commercial Properties Boom, 5/16/2007
The real estate and construction sectors, including the many professions and fields associated with them, make up one of the largest components of the U.S. economy. There is more than $13 trillion in outstanding mortgage debt in America, and more than 7 million homes, both new and existing, are sold annually. For the 2000 through 2005 period, residential construction and sales of existing homes were extremely strong. However, by the end of 2006, the residential market had slumped, and home prices were declining in many areas. Early 2007 has seen a steady deterioration in the housing market in the U.S. The commercial and government sectors are seeing good growth. Values of existing properties have soared and total new construction volume has been high. The industry has been undergoing massive changes in recent years, swinging from booming to deteriorating. The major trends affecting this volatile sector are detailed in Plunkett's Real Estate & Construction Industry Almanac 2007. Some examples include:
- U.S. Homeowners Refinanced Vast Amounts of Mortgages Through 2006, but the Mortgage Market Has Changed.
A rapid rise in home values enabled consumers to obtain much larger home mortgages, or substantial home-equity loans for homeowners who didn't want to go to the trouble of refinancing their primary mortgages. By 2006, the market had changed dramatically as interest rates rose.
- Teardown Trend Explodes.
In trendy neighborhoods, it has become more and more common to see both older homes and substantial, relatively new homes razed and replaced by even more opulent structures that better reflect rising lot values.
- 3) Malls Morph to Stay Afloat.
The days of the dull, old-fashioned enclosed mall are numbered. Of the 48,695 shopping centers in the U.S., only 1,130 are enclosed malls (counts are as of the end of 2005). Anchor tenants such as major department stores are moving or going out of business, leaving mall owners with echoing empty spaces of painfully high square footage.
To find out more about these exciting trends and more, check out Plunkett's Real Estate & Construction Industry Almanac 2007, just released, or go to www.plunkettresearch.com and sign up for a subscription to Plunkett's completely up-to-date online database!
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