Economic Risks to the Economy and Budget of Coral Gables

The IMF identifies the weaknesses in the real estate market and small banks as a risk for the US economy.  This the IMF report prepared prior to the forthcoming meeting of the G-20 countries.  Coral Gables is being concretely affected by these risks.

Another risk to the outlook stems from the possibility of renewed weakness in U.S.

property markets. The foreclosure backlog in U.S. property markets is large and growing, in

part due to the recent expiration of the home buyer’s tax credit. When realized, this could

further depress real estate prices. Small and medium-sized U.S. banks, which have significant

real estate exposure, could experience disproportionate losses and hinder bank supply of credit;

labor market conditions may further deteriorate as losses in housing equity restrain mobility;

and the adverse macro-financial linkages could precipitate a loss of market confidence in the

recovery.