On Thursday former head of Georgia State University’s Economic Forecasting Center, gave insight to hundreds of Atlanta real estate professionals. Now an economist Donald Ratajczak discussed the good and bad about the liquidity crisis for the real estate market.
Ratajczak said he expects residential foreclosures nationwide will be higher this year, predicting the number to hit 700,000, and 950,000 next year. Last year there were 400,000 foreclosures nationwide.
According to Ratajczak “We do have to stop foreclosures and stabilize subprime markets,” suggesting that banks and other lending institutions set up insurance programs for mortgages through Freddie Mac and Fannie Mae, refinance teaser loans such as interest-only loans and adjustable rate mortgages and “give up” prepayment penalties.
Stating, “The good thing about the liquidity crisis is that it runs very quickly,” he said. The bad news, he added, was that it “leaves damage behind.”
Having no compassion for mortgage lenders and stating, “They ought to take a hit for giving out these stupid loans,” Ratajczak said.
Ratajczak predicted as a result of the imbalance taking place in the residential real estate sector; the multifamily housing market will be strong.
Stating, “Some condo projects are going to be luxury apartments,” implying that some developers are going to have a hard time selling condos. He further stressed that the number of housing permits in the metro area has dropped 47 percent over the past year. However, he assured the audience that all wasn’t lost.
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