Residential Real Estate is Not Just a US Problem!

I recently returned from several weeks in Spain. When I left the U.S. I was focused on our economic problems. Though I had read about Europe’s issues, I didn’t think that they could be as bad as ours. I was wrong!

When we arrived in Madrid the first thing I noticed on the ride from the airport was the large number of cranes. When I looked closer I discovered that some projects either had been abandoned or were moving extremely slow.

As we traveled on to Seville and Granada a similar pattern emerged. During a cab ride, I picked the brains of a Spaniard who spoke excellent English (since I can’t speak Spanish!). He confirmed that loose lending had resulted in numerous real estate projects being built. Furthermore, the rising fuel prices had put a dent in the locals purchasing power (gas is $8 – $9 per gallon in Spain). In fact, a week after we left Madrid the taxi drivers and then the truckers went on strike to protest the high taxes on fuel.

As we left Spain I had the feeling that this sub prime mess goes much deeper than the U.S. banking system. In addition, it might take much longer to work through the worlds economy.

Residential Real Estate

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One Response to Residential Real Estate is Not Just a US Problem!

  1. Richmond BC realtor June 20, 2008 at 10:32 pm #

    I think you are right, but Spain has a whole bunch of problems and I don’t think real estate is the source, it’s just one of the consequences.
    I am Vancouver realtor and here in Canada we are facing slowdown as well, but until now it seems just as a “market correction”, market was healthy, so I hope it will be ok soon again 🙂

    Jay

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