Orlando Real Estate

There has been a lot of finger pointing going on lately regarding the real estate finance industry. I think just about everyone has been blamed for the state of real estate finance. Realtors should not have sold the "overpriced" homes, and lenders should not have made sub-prime, interest only, adjustable rate or negative amortization loans. The buyers should not have bought homes they could not afford. The government should have had stricter policies or more regulations. The fact is that real estate was in short supply and money was easy to get.

That was not a problem as long as the real estate market kept moving up and to the right. Where everything began to unwind was when the market peaked and began going back down. Imagine a roller coaster that only goes up. As long as it continues going up, you don't really need any brakes. But you do need brakes because nothing just continues to go up. This should have been evident by the pace at which the market was going up. The mortgage industry did not have brakes in place in the event of the roller coaster actually heading back down.

Had real estate stayed on the same old track it was on for years, we would not be having this discussion. Somehow, it jumped the rails and got on a completely different track with a much steeper slope. Nobody seemed to recognize the potential dangers, and apparently nobody seemed to realize there were no brakes on the car. So here we are with record default rates and an economy that is just starting to come back from this real estate recession. The real estate finance industry needs to take a look at the system and see what types of safeguards might be necessary as we move forward. The old ride was boring and predictable, but the new one is a little scary especially without brakes.

David Welch Real Estate Optimist, Orlando Real Estate