The Home Buyer Market... A difference a 1 year makes

ONE YEAR AGO…
It started with a trickle of failed sub prime loans and without warning, the dam broke unleashing a torrent of failed mortgages and foreclosures. Last year at this time, the mortgage markets were frozen, housing values were plummeting, the stock market was in free fall, Lehman Brothers crashed and burned, and the financial infrastructure of the United States was teetering on the brink of collapse. Foreclosures, bank failures, 401-K’s turned to 201-K’s, and the impending Great Depression was the story of the day.
What a Difference a Year Makes! “The Cavalry Arrived.”
TARP (Trouble Asset Relief Program) is a $700 Billion relief initiative that was supposed to purchase bad loans in order to keep the banks liquid. It was soon determined that this was a bad use of the funds because the banks didn’t like being told what to do. So eventually we got around to using the money to make a market of cheap money so that everybody could refinance or purchase with a very affordable house payment; we went to Main Street with Main Street’s money (the taxes we pay). Imagine that! And… it’s working. 201-K’s are back to 301-K’s, the stock market has regained some strength, the housing market is stabilizing, and Bernie Madoff and a bunch of others are in jail.
What’s Next?
The Good News- The Home Buyer Credit of $8000 will most likely be extended until June. Thus far the Credit has caused a demand for houses priced up to $250,000. Make no mistake, The Home Buyer Credit is providing the impetus for the sudden surge in sales.
The Challenge- Many people are waiting to sell, and then buy, when values go back to the peak. Tell them, “If you can wait until 2023, go ahead.”
The Reality- The window of opportunity is narrowing. The Home Buyer credit will end, mortgage rates will rise, and home selection will dwindle. People are scared to act so it is our job to provide them knowledge that will help them. Perhaps getting one of our job loss insurance policies will do the trick…