Will real estate decline in this 2020 mortgage crisis?

Jun 24, 2020

Will real estate decline in this 2020 mortgage crisis?

Many people who have purchased real estate are wondering if prices will drop, stay the same or there will be new opportunities. So the big question: What do I do?

Generally, house prices are on the rise, although with cycles of increases and small decreases in times of crisis. As examples of this we have the crisis of 2000 called “crisis .com” or the “mortgage crisis of 2008” where the stock market was more affected than real estate.

So in order to know whether or not we should acquire a property, it is important to know the causes that gave rise to them. So we explain briefly each of them, in order to understand the current moment.

In 2000 with the digital era, online companies called .com appeared, and people eager to make a quick profit invested their money in these companies, causing the stock market to skyrocket. Competition made many of them disappear which brought a fall in the stock market due to the loss of value of the shares, causing only a few to become established in the market.

Similarly, in 2008 the government cut the interest rate to revive the economy so that banks could lend more money to people to buy a house. However, the banks did not check if people really had the income described, so without these restrictions, they lent money to everyone. By disseminating the information, they bought up to two or three properties. At the same time, interest rates rose as a result of a group of investors buying these debts from the banks (some of them unpayable) and many people fell into foreclosure, losing their homes.

That is why banks are currently asking for a large number of collections, verifying that people really have the capacity to pay. With the appearance of the COVID19, everything is frozen because of confinement, despite coming with a healthy economy with the lowest unemployment rate in a long time.

With the emergence of the virus, it has been observed that people are cautious about investing. In addition, difficulty in paying mortgages has been observed. That is why the government is trying to provide a number of aids so that people do not lose their homes. In fact, almost all banks have banned foreclosures for non-payment, freezing mortgage payments for three to six months. This “frozen” amount is added to the end of the credit.

So if you have a problem, you should call your bank and discuss your situation. Neither the government nor the banks are interested in taking houses, it’s not business, since banks earn is by the interest that people pay.

On the other hand, there is a freeze between supply and demand, as few people want to buy because of uncertainty and, on the other hand, few people want to sell because they need their house to live. So as long as this remains the case, the price of real estate will be relatively stable. It all depends on how long this situation lasts and the economy opens up again as everything returns to normal.

FREE CONSULTATION

How can we help you?

5 Ways The New Stimulus Bill Can Help Small Businesses

The new stimulus bill introduces many benefits to American citizens, especially small business owners. Small business owners now may be eligible for a second PPP loan, and may pay less taxes. Find out everything you need to know here.FREE CONSULTATION How can we help...

A National Ban on Evictions Has Ended, But Another is Set to Take Its Place

The new eviction moratorium that lasts until January 31st will allocate $25 billion in rental relief funds for renters and landlords. Read more in the article here.FREE CONSULTATION How can we help you?We're here to help. Get in touch for answers to...

Congress Extends COVID-19 Relief Aid for U.S. Citizens, Including the Unemployed and Renters

More help is on the way -- The United States Congress is working on providing pandemic aid to American citizens to help minimize the financial impact from COVID-19. Learn everything you need to know here.FREE CONSULTATION How can we help you?We're...

Trump Extends Work Visa Ban to March, Citing Labor Market Woes

President Trump has extended a ban on work visas and certain green cards through March 31st. This means the restriction will still be in place when President-elect Joe Biden takes office. Learn more in the article here.

Biden has nominated first-ever immigration head of DHS

President-elect Joe Biden recently announced his nomination for leader of the Department of Homeland Security, Alejandro Mayorkas. Mayorkas is an immigrant who came to the U.S. from Cuba as a political refugee, and he will be the first immigrant and first Latino head...

Democratic candidates debate: Addressing immigration and equality l ABC News

Now that the dust has settled, look back at what President-elect Joe Biden and other democratic presidential primary candidates had to say about immigration, asylum, the DACA program, and the road to citizenship during the Democratic debate. FREE CONSULTATION How can...

Biden and Trump discuss their views on immigration policy

On ABC News, President-elect Joe Biden discusses his plan for immigration reform under his administration.

Joe Biden: Six Key Policies from his 2020 Presidential Campaign

In this video for Guardian News, President-elect Joe Biden explains six key policies from his campaign, including his plans for the immigration system.

President-elect Biden on the Latino Community and U.S. Immigration

As Inaguaration Day approaches this January, many people are anxiously waiting to see what decisions and policies President-elect Biden will make. Take a look at the incoming administration's ideas for the Latino community here. Highlights include expanding healthcare...

How to apply to economic aid due coronavirus?

How to apply to economic aid due coronavirus?   As of Monday, April 13, people living in the United States began receiving the popular government aid for the duration of the quarantine, $1,200. However, there is a great deal of ignorance about this issue because...
Combined Shape 1 white

CIVIL

Shape white

COMMERCIAL

Combined Shape 4 white

IMMIGRATION

Combined Shape 3 white

LANDLORD - TENANT

Combined Shape 2 white

SMALL BUSINESS

We're here to help. Get in touch for answers to any of your family, civil, or immigration questions.