Mortgage crisis influence on the U.S. business market
In 2007 ended the era of "bubble" and the market, reaping the consequences of buying frenzy, entered the crisis phase. Start of this crisis has been given in the summer of 2007, and it began a collapse of one of America's oldest investment banks - Bears Stearns. In order to somehow save the day, the Federal Reserve (the U.S. central bank) had to guarantee payments for investors on credit obligations of the bank. Together with a decline of the company, following a domino effect, the credit market and the U.S. are one of its basic parts - mortgages - began to crumble like a house of cards. Because of the high interest rates, issued by so-called "floating interest", more and more homeowners began to experience problems with mortgages and put their house up for sale. The proposal exceeded demand, and the owners of real estate, not being able to get rid of it on the open market, were forced to leave their homes for the borrower, thereby initiating a procedure, called in the U.S. foreclosure.
Thanks to AmeriSave Mortgage Corporation we can see in what cities the U.S. property prices have fallen to a greater extent. "City-winners" who end up in the top ten were Las Vegas, Miami, Florida, Detroit, Phoenix, Arizona, then five "gold" cities of California - Riverside, San Diego, Sacramento, Anaheim and Los Angeles - as well as Florida Neypel. House prices in these cities continued to fall in 2008, and the loss of their value ranged from 14 to 20%. What was the cause of this crisis? First of all, real estate prices in the above cities in recent years, grew up in largely due to the increase of income and population growth in the cities, but because of the prevailing trends in the speculative real estate market in these regions. In Detroit, the capital of the U.S. auto industry, the reason for the fall in prices was a marked decline in the population of the city, due to layoffs in the U.S. auto giant General Motors, Ford and Chrysler.
However, not all price increase was caused by speculative tendencies. For example, in Atlanta, house prices rose by a substantial increase in the population of the city. Starting with the one hundredth anniversary Olympic Games in Atlanta in 1996, the property market in the city began to develop more rapidly. Having in its credit the world's largest airport, an extensive network of high quality roads, the latest telecommunication system, a soft warm climate, a lot of available land for development, quality of life and affordable housing in Atlanta last decade has added an average of 150 thousand people a year. However, financial fraud in the mortgage market and the housing market have forced Atlanta to feel a tangible drop in prices.