It seems that failing sales and rising inventories are affecting the overall performance of the real estate industry. According to a recent report by economictimes.indiatimes.com, "The realty industry is facing a terrible slowdown, with sales down drastically and the inventory of unsold flats piling up."
For instance, in San Francisco where real estate prices are so high, the scene is not getting any easier. Even though investors are pouring in and the Chinese money has been helping power the local real estate market, it seems that it is still not smooth sailing for the most bullish local realtors, since they have been flinching as markets on both sides of the Pacific plunged in recent days, as stated in a report by sanfrancisco.cbslocal.com.
The real estate industry is affected by both the local and international markets. Both the earlier drop in the Chinese equity market coupled with the most recent drops in the U.S. stock market, is a bit of cause for concern, as further reported by sanfrancisco.cbslocal.com. The property prices in the metropolitan areas have risen but at such a slow pace, while the cost of capital remains high and is surging even higher. Experts feel there is more pain in store for the real estate sector, especially the residential segment, as stated in recent report by economictimes.indiatimes.com.
It could be true since the loss is being felt one way or another. However, it is still not an assurance that it is an epic fail. A correction does not mean that real estate prices will come down by 30-40 percent or "a 30-40 percent crash can happen" only when the economy goes into a recession, as further stated by economictimes.indiatimes.com.
Despite the schemes presented by realtors and developers alike, home buyers are still not biting. According to a recent report by economictimes.indiatimes.com, "Cash-strapped developers are offering bigger discounts, throwing in freebies and coming up with innovative financing schemes to attract buyers."
