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The state of the market
As 2008 draws to a close, we look back on the housing market and the economy and many of us might be thinking, “Wow, what happened?� 2008 was a very eventful year indeed. It was a year in which the global banking system fell and problems that began as a US economical issue became or worldwide, international crisis.
The financial problems split from the banking sector to virtually all economic sectors and then across the globe. The UK began seeing problems in early 2008 with signs that things would only get worse. For property investors, it was hard to judge if this was just another slump or the beginning of a devastating recession that could easily lead to a depression.
By April, most UK property investors knew the smart move was to steer clear of new property investments in the UK and many began to look abroad to strengthen their portfolios. Property in the UK went from bad to worse with many homes and developments left unfinished, sitting as a constant reminder of the condition of the market.
The US didn't fare much better with homes being foreclosed on left and right and people left homeless or unable to purchase new homes. Many were forced to rent and many for sale homes stood vacant and market prices dropped more and more and still no one was able to buy.
Most were denied loans as banks had to scrutinize their deals and loans and those who may have been eligible for a loan became suspicious and untrusting of the banks and financial institutions. The market in the UK continued to drop throughout 2008 and many predictions think it will reach the bottom in '09. While it's uncertain how much longer it will last, one thing remains true: there isn't much further to go to reach the bottom.
What has happened to housing prices in the US and the UK over the past year? It's hard to sum it all up in one line since these are ever-changing markets. With the economies of both countries facing troubles, it's easy to say the housing markets have been unstable at best.
Savvy investors do not have to let this be their downfall. While most are cautious about getting into the US or UK markets too soon, there is a wealth of opportunity in other countries. Many investors have used 2008 as an opportunity to create a global portfolio.
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