Source: Yahoo! —
The only bad thing about the best parties is that no matter how good they were, the good times can’t go on forever.
Investing is always cyclical and even investments like real estate which have performed over time will have bad cycles. It certainly appears as if the Federal Reserve’s decision to raise interest rates has ended the boom period of strong profits that investors enjoyed after the 2008 crash.
It’s impossible to avoid the truth that many real estate markets that were scalding hot as recently as a year ago have gone ice cold. This time last year, the “seller auction” was almost commonplace. A seller would list a property for sale in a hot market, and a flood of offers would come in over the asking price.
Buyers were bidding against each other, and it got so intense that some buyers were sending photos of their families and personalized letters to the seller. Many major U.S. cities saw the average home price hit the million-dollar mark, and even fixer-uppers were selling in the high $800,000 range. Sellers and real estate agents were literally having the time of their lives. Then the Federal Reserve stepped in.
Rate increases became an unofficial “curfew,” sending almost all the partygoers home early. But even in that framework, there will be markets that don’t experience as big a fall as others. Benzinga takes a look at some of the real estate markets that are seeing the biggest downturns and what that means for the real estate game.
The Sun Belt
Perhaps no real estate market in the country heated up faster during the COVID crisis than the Sun Belt. Lured by the low prices and warm weather, people streamed into the Sun Belt, which led to a massive jump in home prices. That trend has certainly reversed itself.
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