For those in the real estate business or those with commercial real estate, the current state of the real estate market likely has you on edge. It seems every month, interest rates are rising, and there does not appear to be any end in sight. This is why it can be so important to look at potential trends into the new year.
Interest rates
Most experts expect interest rates to continue to rise, likely for the remainder of the year. Does this mean that we will fall into a recession? Who knows? Are we already in a recession? There is substantial disagreement. The key is that interest rates are likely to continue to rise, so we should plan accordingly, especially when contracting with rates that have variable interest rates.
Contractual breaches
Speaking of contracts with variable interest rates, many experts expect the rates of contract breaches to rise sharply this year as a result of this spike in interest rates. Why? Because many formerly willing buyers will get cold feet if they have not locked in a favorable interest rate prior to the deal. Plus, real estate valuation swings could kill deals at a moment’s notice. If you have Norcross, Georgia, contracts, pay attention to interest rates, closing dates, cancellation provisions, etc.
Real estate fraud
Some experts say that real estate fraud has increased by well over 22% since the Federal Reserve has started raising rates. These rapidly fluctuating rates have opened the door to commercial fraudsters who are misrepresenting terms or who never actually plan to close their deals. Personal due diligence or hiring Norcross, Georgia, due diligence attorneys will become even more important this year than they have been in years past.
Internal business disputes
As the interest rate chaos continues, expect some businesses to fracture as well. As financial stress increases, historically, businesses begin to implode, especially those with ties to commercial real estate. This could be a partner forcing a sale, forcing receivership or simply disputes over profits. These are again areas where an experienced Norcross, Georgia, real estate litigator may be able to resolve disputes before court is necessary.
Should a recession finally hit, one thing is clear, no Norcross, Georgia, business will be untouched. Now is the time to start planning for the economic severe weather.