Even with the Great Recession drawing to a conclusion and a resurgence in home prices, there are still many financial factors to be aware of in today's real estate market. Overall, while the continued growth in the capital market means that credit is still more readily available than it has been in the recent past, be on guard for the inevitable end of the honeymoon period. While interest rates rates remain historically low, their eventual rise might cause anxiety and make consumers wary of taking on new loans.
In the housing market, high amounts of student debt, and debt in general, are also making people hesitant about taking out new loans. Whereas in the past young professionals would look to purchase a home, today they are already managing large student loans and may choose to put off buying. Financial concerns are also affecting more experienced buyers. The recent financial crisis had a profound impact on many people's investments, and those close to retirement are likely to find that their retirement accounts are underfunded. This can lead to older buyers putting off the purchase of a retirement home, or to home downsizing.
In the commercial market, one of the greatest financial factors is the glut of overpriced commercial property combined with a lack of liquidity for new commercial loans. There are billions of dollars in commercial loans that will need renewing in the next ten years, and there are fewer lenders willing to take the risk on new loans. Despite this, commercial properties in desirable markets have been seen as good investments and the prices have been driven up, perhaps higher than the market can actually support long term.