Orlndo Real Estate Prices Expected to "Rust, Not Bust"

Economists are finally predicting a slowdown for the largely overheated Orlando real estate market. However, thanks to a strong economy and steady income and job growth, the Orlando real estate “slowdown will be relatively mild compared with past downturns.”

Because of a tight monetary policy and an economy that is expected to grow by over 3.5 percent, mortgage rates are increasing. Financial experts believe that by 2006, interest rates will have reached 7 percent. When interest rates finally reach that point, economists predict that Orlando real estate sales and housing starts will drop by at least 5 percent.

But even with slow sales and decreased building, the Orlando real estate market shouldn’t soften too much. Experts aren’t predicting a severe plunge in prices. Chief U.S. economist for Morgan Stanley, Richard Berner, says that Orlando real estate “prices will rust, not bust, for the next few years.”