I know many of you are concerned about the troubled financial markets and are wondering how the federal government’s actions will help resolve this banking crisis. Here is the latest information on what is happening in the housing market and the National Association of Realtors (NAR) position on the government’s plans to rescue Wall Street from our NAR Chief Economist, Lawrence Yun.
This massive $700 billion bill will be fast-tracked through Congress this week to give the U.S. government the authority to buy bad mortgages off the books of Wall Street firms. The principal goal of this new Treasury authorization is not to make money but to unclog the financial pipelines through the purchase of certain mortgage backed securities. Treasury intervention will help restore the proper valuation of these illiquid assets. Currently they are being significantly unvalued.
Hank Paulson (heading up implementation) has a tough task. He must permit capital to move around. That is the essence of capitalism. He must at the same time also protect taxpayer money. The return on the taxpayer gamble depends on two things: at what price the Treasury will buy bad mortgage debts off Wall Street books, and the future mortgage default rate. The default rate, in turn, will depend on the housing market recovery. Knowingly or not, we are now part of the 75 million homeowners and 100 million taxpayers who have become the key stakeholders on the side of housing market recovery.
You are welcome to read Lawrence Yun’s entire September 22nd commentary, which explains the reality behind the government’s proposed “investment” in the financial markets. Visit http://www.realtor.org/research/commentary_700_billion
Now what’s this mean for us? You have heard me say, real estate is a local business. We have our fair share of foreclosures and short sales which have affected all our property values. The market will come back; we are seeing the activity. It remains a great time to buy, particularly for 1st time home buyers and those moving up from a less expensive home to a more expensive home.
We have buyers that are looking for homes that are in “move-in condition and can be priced right. Who do you know that has been talking about a move? We are here to help you understand all your options. What are your conserns?
One word describes best how to ride out the current market environment: Patience.
Thursday, September 25, 2008
Friday, September 19, 2008
Welcome!
The end is in sight...
If you’ve been following the national news recently regarding the bankruptcy of Lehman Brothers, the stock market getting hit and Fannie and Freddie being taken over by the government, these are all the classic signs of the bottom of a market correction.
Right now, we don’t have so much of a real estate problem as we do a banking one. Prices have mostly stabilized across the country and in the short sale and foreclosure market we’re seeing multiple offers. Although I do believe there are a couple more banks in trouble and there’s not yet a full complement of mortgage products to satisfy all the buyers in the market, trust me that will get sorted out. For thousands of years lending money has been one of the most profitable businesses in the world. Banks make money by lending; not by deposits. So they will figure out ways to package loans and get cash into the hands of consumers. I believe this is the final cleansing process and in the next six months we’ll start to come out on the other side of this.
Make sure you don’t get caught in the “cudda shudda wudda” of taking advantage of this market. It remains a great market for first time home buyers, move up buyers and investors. We won’t know what the bottom is until after but I believe it’s pretty close.
In Stark County and the surronding areas it is still not a bad time to sell. Over 30% of the new listings are selling in the first 30 days. We have buyers that are looking for homes that are in very good condition priced right. If you or someone you know is thinking about a move, now is a great time to talk to a professional about your situation and goals.
Remember, the market is local and so are we.
Oh, by the way... we are never too busy for your referrals.
If you’ve been following the national news recently regarding the bankruptcy of Lehman Brothers, the stock market getting hit and Fannie and Freddie being taken over by the government, these are all the classic signs of the bottom of a market correction.
Right now, we don’t have so much of a real estate problem as we do a banking one. Prices have mostly stabilized across the country and in the short sale and foreclosure market we’re seeing multiple offers. Although I do believe there are a couple more banks in trouble and there’s not yet a full complement of mortgage products to satisfy all the buyers in the market, trust me that will get sorted out. For thousands of years lending money has been one of the most profitable businesses in the world. Banks make money by lending; not by deposits. So they will figure out ways to package loans and get cash into the hands of consumers. I believe this is the final cleansing process and in the next six months we’ll start to come out on the other side of this.
Make sure you don’t get caught in the “cudda shudda wudda” of taking advantage of this market. It remains a great market for first time home buyers, move up buyers and investors. We won’t know what the bottom is until after but I believe it’s pretty close.
In Stark County and the surronding areas it is still not a bad time to sell. Over 30% of the new listings are selling in the first 30 days. We have buyers that are looking for homes that are in very good condition priced right. If you or someone you know is thinking about a move, now is a great time to talk to a professional about your situation and goals.
Remember, the market is local and so are we.
Oh, by the way... we are never too busy for your referrals.
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