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In the wake of the Fed’s half-point rate cut, the financial markets sure are calmer, but the housing market still has a bumpy road ahead.
Today, the Commerce Dept. announced that housing starts tumbled in August to their lowest level in 12 years. “As miserable as the downturn has been, it is likely to take a turn for the worse over the second half of the year because of the recent turmoil in financial markets,” says Global Insight economist Patrick Newport.
Not good. So what’s good? While starts were down 37.7% in the Northeast and 18.4% in the West, they were up 11.4% in the South. The South seems to have everything going for it right now: affordable housing, a positive outlook for near-term price appreciation and economic growth, and, according to our recent analysis, the best areas to find real estate bargains.
The Research Triangle area of North Carolina (Raleigh, Durham and Chapel Hill) is no exception. The region is seeing a surge in employment growth with companies like Lenovo and GlaxoSmithKline making it their international business headquarters and foreign investors are all over the commercial real estate here. According to the World Trade Center-North Carolina, the Triangle has received over $668 million in European foreign direct investment and nearly $400 million in Asian investment in the past three years.
I figured I’d make a habit of mentioning a positive real estate story every once in a while on this blog. So there it is.
BusinessWeek editors Chris Palmeri, Prashant Gopal and Peter Coy chronicle the highs and lows of the housing and mortgage markets on their Hot Property blog. In print and online, the Hot Property team first wrote about the potential downside of lenders pushing riskier, "option ARM" mortgages and the rise in mortgage fraud back in 2005—well ahead of many other media outlets. In 2008, Hot Property bloggers finished #1 in a ranking of the world's top 100 "most powerful property people" by the British real estate website Global edge. Hot Property was named among the 25 most influential real estate blogs of 2007 by Inman News.