Question

Simply put, is the US real estate market a primary driver in the US economy, and what are your thoughts as you have observed the market for the past 5 or so years?

More importantly, what is your considered opinion as you look into the future of the housing market for the next couple of years?

Answer 1

Yes, United States real estate market is a primary driver in United States economy as they can be seen that this market has caused the economic boom in United state and then it also led to a recession in 2008 so it is a highly significant sector which can drive the economy standalone and it can cause volatile movements in the overall economic scenario.

United State real estate market is a reflection of various securities which are floated in the real estate market and they are representative of the sentiments of investors into the real estate and real assets as well so they will be trying to ascertain the sentiments of the investor on the ground and they would be trying to provide a basis for the equity markets as well so it can be said that these securities are the real securities which can be put as collateral against loan for various assets and in need to have a Credit boom in the economy, one will have to flourish its real estate market so it can be said that real estate markets of United States is a very significant sector to have an economic upside or a downside and it should be properly managed as we have seen the adverse effect of mismanagement of real estate sector in 2008 through a global recession.

I see that in past 5 years the real estate market has once again started to show the pick up on the upside and it is having a upward trajectory because of push up in the demand through constant regulatory policies and rate cuts which are targeted to stimulate the demand into the economy and this has also led to a demand into the real estate sector and which has also led to a run in the equity markets on the upside.

if I am looking for future of the real estate market then I am concerned about the mismanagement which is once again appearing through bubble in the real estate prices which cannot be sustained for a longer period of time and I think due to the coronavirus concern the real estate prices had started to correct significantly but this bubble is not as big as the one in 2008, so it will be properly managed through proper proactive reaction by the Federal Reserve so that they can control the the interest rates along with the monetary policies in the economy and they will be trying too help with the demand and supply in an appropriate manner so that a fair pricing could be maintained into the real estate market and another economic downturn can be avoided to a great extent.