Alex J. Pollock recently wrote,“If private investors want to take credit risk, and borrowers want to take a chance in order to own a house, should they be allowed to, even if it might lead to consequences … . I’d say they should. Credit is a central force in a market economy, and boom and bust cycles are the unavoidable price of achieving the long-term growth that markets — and nothing else — create.” Should builders consider Pollock’s opinion as they look towards the future? Is the current subprime lending scenario as bad as the media make it out to be? Can the real estate marketplace endure $1.3 trillion in mortgage delinquencies and defaults? “Builders are uncertain about the consequences of tightening mortgage lending standards for their home sales down the line, and some are already seeing effects of the subprime shakeout on current sales activity,” said National Association of Home Builders Chief Economist David Seiders. Real Estate Development : Principles and Process

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