Real estate construction downswing exceeds expectations
In November 2016, the construction of new homes fell around the country, but the dip was greater than what experts had previously forecast. Observers say that while many factors impacted sales and construction, historical spikes in mortgage rates might have major stopping power that slows real estate market growth in Florida and elsewhere.
According to Commerce Department statistics, new construction of residential homes dipped almost 19 percent before settling at around 1.09 million in November. Just a month earlier, new ground-breaking operations had spiked by 27.4 percent, which was the biggest increase since the early 1980s. Nonetheless, experts say that the tumultuous figures hide increasing enthusiasm on the part of home builders even though buildable lots are few and far between and skilled worker pools are dwindling.
Economists claim that barring factors like interest rate dampening, home builders are likely to buckle down and start more new single-family homes. Compared to earlier periods, the end of 2016 represented an overall uptick in average home building activities, and some believe that the Trump administration may give the market an additional boost by removing regulations. Nonetheless, the number of permits issued in October dipped by 4.7 percent. Construction of single-family homes also dropped by 4.1 percent in October, and although multifamily home groundbreakings increased by 76 percent at the same time, they saw a massive 45.1 percent decrease the month after.
Market swings are a fact of life in the world of real estate. Developers who want their projects to remain as profitable as possible need to devise deals that let them work around uncontrollable economic conditions. The contract terms that developers and investors agree to have major impacts on their legal obligations. Talking to a lawyer might make it easier to understand the ramifications and business implications of real estate agreements.