It looks to us, that even though we have a shortage in housing inventory helping to keep home values up, we see a possible home value correction on the horizon.
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Hopefully new loan programs will become available once deregulation begins and/or builders will start building smaller starter homes.
Hmmm…….wonder if we might see assumable loans as rates go up. Wouldn’t that be the bomb?
You are correct in your assessment of why real estate prices are decreasing. What you are not correct with in your assumption is this:
1. This is NOT a “healthy” housing market. Nothing about our housing market is sustainable. It is a bubble-market that has been re-inflated by demand-side manipulation through artificial interest-rate suppression and also through supply-side manipulated by FED policy that has tied the hands of banks and has prevented those banks from foreclosing on millions of defaulted borrowers over the course of the last 5 years. (Ever hear of zombie foreclosures?) It is not, and hasn’t been a healthy market tied to real income/wages since the 1990s. Therefore, it is not, by definition, a long-term “healthy market”. What it is is a short-term, over-heated, over-manipulated market that about to correct itself in a severe, long-term, and super-recession-type way.
2. This IS the top of the bubble folks. This is as high as it gets and this is as good as it is going to get. Sure, the private sector will start their super-crazy “Alt-loan” programs to squeeze the real estate turnip for the last few ounces of loan business. But Alt-loans (non-conforming, sub-prime, or whatever fancy name you want to give it now) is a symptom of a housing-policy disease. It’s a last-ditch desperate attempt by the Wall Street mortgage-backed securities market to make a few more short-term profits over the next couple of months; just before the bottom falls out. But just like when sub-prime loans signaled the beginning of the inevitable crash of 2008, history is about to repeat itself.
And once it does, the real estate market, the lending industry, and all that you think that you know about the stability of the economy is going to go right out the window.
Healthy market? describes what? for who? Lincoln “no man is safe when congress is in session” they are always in session. If you stay with your bucket in the same stream. When it dry’s up, what’s healthy? Try another stream. How many foreclosure realtors, stood in that stream, made all kinds of $$. Treated fellow realtors like caga. Then it changed and they stayed looking up stream, what is healthy? Healthy is NREP, knowledge, sources, reading what you can get your hands on. Healthy is awareness of market change and the factors that bring it about. Healthy is knowing change is the constant. Knowing your market, markets just are. Your health is what matters. Then anticipating the market, being the MD the knowledgeable source of the source for your clients. Is your patient a buyer or a seller, estate sale, foreclosure, investor? What’s healthy to them? Just a thought.