News – Page 3 – Habitat Abstract

Troubles in Commercial Real Estate Result of High Interest Rates, Low Property Values

January 22, 2024
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According to a recent article by Business Insider, the commercial real estate market is set for some difficulties in the near future, with there being a risk for a significant downturn. This is due to two primary factors: relatively high interest rates, and low commercial property values. As a result, many current commercial real estate owners are dealing with negative equity on their properties, putting some at risk of default.

A Mirrored Set of Problems in Commercial, Residential Real Estate

January 17, 2024
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Both the commercial and residential real estate sectors are facing serious troubles, albeit for almost entirely opposite reasons. The residential real estate market has been significantly hampered due to high housing prices and a lack of available inventory, while commercial real estate is facing a potential crisis from a glut of available properties that no one seems to want to buy. In both cases, however, high interest rates have proved to be an aggravating factor, but fortunately that may be getting better in the near future.

WeWork Files For Chapter 11 Bankruptcy

December 7, 2023
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Once one of the largest holders of commercial real estate in the United States, WeWork has filed for Chapter 11 bankruptcy. At its height, the company was worth an estimated $47 billion during a round of venture capital in 2019. However, a combination of economic factors and external economic factors have led the company to fall on hard times, leading to them seeking bankruptcy protection.

Decline in Interest Rates Leads to Spike in Refinancing

December 7, 2023
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A recent decline in mortgage interest rates has led to a sudden spike in refinancing, according to the Mortgage Bankers Association. This dramatic increase in people seeking to refinance their mortgages may signal the end to the Federal Reserve’s efforts to combat inflation through interest rate hikes. However, overall demand for refinancing remains low compared to previous years, indicating that many homeowners are not ready to get excited about the real estate market just yet.

Housing Industry Reps Ask Fed to Stop Increasing Interest Rates

November 17, 2023
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Three major organizations representing the housing industry, The National Association of Home Builders, the Mortgage Bankers Association and the National Association of Realtors, all wrote to the Federal Reserve conveying “profound concern” over the Fed’s high interest rates. They fear that sky-high interest rates are not only slowing housing sales, but that it might lead to a recession in the market. This comes as the Fed is reportedly contemplating further rate hikes to combat inflation.

Foreclosure Filings Up 34% Since 2022

November 17, 2023
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The number of people experiencing foreclosure increased by approximately one third this October, compared to the same time last year. This significant increase in foreclosures is attributed to the lingering effects of the COVID-19 pandemic, with many courts still sorting through related litigation. Fortunately, however, experts have said that a 2008-style crash of the housing market is unlikely.