Real Estate Market Trends

Housing market woes, fueled by the sub-prime lending meltdown, has expanded to Wall Street as credit ratings are cut.

Standard & Poor's has warned that it may slash the credit rating of more than $12 billion in bonds backed by risky home loans (yes, the sub-prime loans) and Moody's Investors Service wasted no time in actually downgrading its rating on nearly 400 bonds backed by residential mortgage-backed securities that were issued in 2006.  Credit ratings are being cut because borrowers are missing mortgage payments at a rate much higher than expected. 

These types of bonds represent a principal source of financing for the housing market.  Lower credit ratings could cause a snowball effect that might finally put an end to what has caused housing prices to bubble: easy access to money.

Commercial Property: An Attractive Investment Alternative

If you are a real estate investor, you should seriously consider changing investment property from single family homes to commercial real estate including apartment buildings, office and retail centers, mobile home parks and the like.  Property values for these types of properties are not tied to the whims of frenzied buyers and their marginal credit.  Instead, commercial property values are linked to the income they produce.  You'll enjoy monthly cashflow as well as increasing appreciation.

You don't need perfect credit or a large downpayment for commercial property either.  You can leverage in with only 10% down for investor properties and just 3% down if you plan to occupy even a portion the building.  For more details on these types of loans, visit my homepage.

Tags: real estate, investing, housing, business, commercial property, commercial loans, housing market