If one industry had to be mentioned which has taken a battering during the recent economic crisis during 2008 and 2009, it is without doubt the real estate market. In fact the whole sub prime crisis arose because of huge defaults in home loans and forced preclosure of home loans. It meant billions of dollars of loses for banks and money lenders, both public and private and also led to a great human catastrophic condition with thousand of homes being snatched away from their hands and people were literally made to spend sleepless nights without any shelter.
What was the reason for this unprecedented crisis in the real estate market? The reasons could be many. First and foremost greed is the biggest reason for this disaster. Big money lenders and banks started lending left, right and center without proper due diligence by the credit departments. Loans worth millions of dollars were given out to people who were not even worth a few hundred dollars. It was done with the object of building a sizeable assets portfolio in their books which they later planned to sell to some other organizations at a huge profit.
But the assets which they built over a period of time through reckless lending were not assets at all but were just junks of paper. The real estate marked had collapsed world wide and this led to lot of people being thrown out of jobs and resulted in default of their loan commitments. Banks were caught in this vicious cycle of economic downturns and big names in banks and financial institutions came crumbling down like nine pins.
However, the last few months are slowly seeing things limping back to normal but the scars are very deep and it will take a number of years before confidence is reestablished in the real estate industry. So, anyone wishing to make real estate as their career should wait and watch for a few more years.