Today: Stocks skidded this afternoon, with the Dow’s nearly 778-point drop being the worst single-day point loss ever, after the House rejected the government’s $700 billion bank bailout plan.
So are we back to using Monopoly money? Just about. Although the nation does not want to bail out the banks, it remains a catch 22. Should we not step in, our economy will crash and burn (we are already smoldering). Should we step in, we get a LOT of egg on our face but we will survive. Remember the little boy who admitted he chopped down the apple tree? The little egg turned into our first President of the United States.
The current real estate market is seeing more buyers out looking at homes. Not that we are even close to being out of the woods, there is something in the air that has buyers looking and preparing for the moment they can jump back into home ownership.
Now that we have/almost have a bailout of the bank and mortgage industries, what is next for Joe and Jill Consumer?
Coming soon to a tv near you . . . the economy disaster! Good news for real estate? YES! Because of the market instability, folks are starting to make property purchase with the expectation of long term cyclical growth. After all, we are not manufacturing more land!
Q: If the mortgage company that holds my mortgage goes out of business, what happens to my mortgage?
A: If your mortgage company goes out of business, your mortgage is still safe. These good mortgages get bought by another bank. So nothing will happen to you or your home.
Donald Trump and Larry King speak about buying in today’s market. Short and sweet.
These uncertain times are certainly putting life in perspective and should the government plan fail to have an affect on the economy, we will be looking at a very disappointing holiday season for brick & mortar as well as for online sales. In the real estate community, we will see heavy investor purchases continue during these times disproportionately to the amount of homes and families that go into crises mode.
Here are the ratings of banks and thrifts for safety and soundness on a scale of zero (worst) to 99 (best), as of the end of March, for the nation’s largest bank holding companies and thrifts compared with others in their peer group.
So we have weathered a weekend of mulling over the government’s plan on helping with foreclosures. The fact is now people want to buy. The problem is they cannot get qualified for financing because lenders have tightened up their rules so that only people with the highest credit ratings can get approved. At this moment we haven’t seen the interest rates fall enough or the mortgage qualifications become realistic for Joe and Jill Buyer.
The Bailout: The plan, the cost, will it work and will this help homeowners.
Make You Home Qualification List:
With too few qualifiers you have far too many homes to choose from, with too many you are looking for a needle in a haystack.
When viewing foreclosures be very careful. We have seen instances where they have been stripped of all appliances, fans, and even switches and any lighting. This leaves open wires and areas that leave very sharp edges. Usually the power and water have been cut, but be wary that either may not have been disconnected or you might get the shock of the century.
Just when you think the market is back . . . WHAM the government steps in! This time they bailed out AIG to the tune of 85 Billion of American Tax Payer Dollars!. This was almost too much as the next news that hit the market hard today was regarding a report on new home construction that showed that housing starts dipped to a 17-year low. So we watched the Market drop down 400+ points for the second time in the week which is driving more investors out of the market and into looking for real estate deals.
The central bank left its fed funds rate at 2% despite increased hopes for a rate cut. It did look like they were very seriously thinking about it because yesterday we saw the market with it’s largest slide since 2001 and we saw the insurance giant AIG drop from the $90/share this year to just [...]
The insurance industry works on a 100 year flood plane and now Alan Greenspan has put our economy on the same plane: He stated that our economy is in a ‘once-in-a-century’ crisis. He added during an interview Sunday with ABC’s “This Week”, “that more financial firms will fail and that housing won’t stabilize until 2009
Yes the bank crisis over the last few weeks led to the Freddie / Fannie failure. Yes this should lead to lower mortgage rages – and in fact they have dropped over the last 2 weeks. But will your ability to gain a loan increase?
“There were 304,000 homes in some stage of default last month, and 91,000 families lost their homes.”
My thoughts on the timeframe for market to rebound have been very firm: Our market will bottom out early March / April of 09 and we will begin our climb out of the basement next Summer and Fall. My reasoning being that the foreclosures have brought out the investors in droves once more. Multiple offers means multiple buyers and as they “lose” the incredible deals to other investors, they will go for the great deals to be able to still play in the game. After all this market is doomed to increase, all real estate is cyclical and we are fortunate to be almost at the bottom.
Freddie and Fannie bailout… yes we will see tougher market conditions to obtain a mortgage, but we will also see lower rates (estimates of a 1 point drop have been discussed)!
From CNN “Rescue Cost: The Big Unknown”
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