Interest Rate Cut . . . Is This The Bottom Of The Real Estate Market?
The Fed rate is a great move, but, at least as far as housing goes in San Diego, will be of little help.
The San Diego homeowner who purchased in 2005 even with a FIXED rate loan for 90% of the purchase price, will today find that the mortgage amount is in many cases thousands of dollars greater than the current resale value. What about the thousands who purchased homes with 100% loans?
So, will .05% loan cut entice them to keep up payments? Certinaly not if, as many expect, home values continue to fall! [tags]interest rates,Federal Reserve,mortgage rates,real estate market[/tags] San Diego real estate agents
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I think now is a great time to be a first time buyer-you aren’t trying to unload a place just buy one. You have a great selection and people are willing to give more on price. If you have excellent credit and can get a loan you are in good shape. The folks having trouble are likely people who shouldn’t be getting large scale loans in the first place or they are going for more home than they can really afford.
Although the mortgage rate has come down a bit and many are applying, two questions remain. How many are actually eligible? And how many have over financed their houses with ARM’s just now coming into the reset of finance rates, especially those foolish enough to go with just interest payment loans. Over two million coming up in the next three months. This has gone well beyond the sub prime market and into the prime.Even with government help I think that will only delay the inevitable, housing prices, energy prices and cost of living has greatly increased while wages have remained for the most part stagnant in comparison. People have used their houses as a giant ATM and now with the glut of houses on the market find that they are worth less than they owe. THis will not settle out for at least a year with prices dropping another 7-8%, if the government does step in with a program, then figure a delay of about a year, and this dragon will rear it’s ugly head up again, shortly after elections. thus adding another year and another 4-5% Depreciation. The cure is a resetting of the over evaluation of housing, or bursting of the bubble, as with the dot com fiasco. But it is an election year so band aids will be applied to the problem in order to get re-elected. San Diego drunk driving defense lawyers
Houses will only fall 30% if everyone rushes for the exits. 5 years ago many markets were underpriced and it’s highly unlikely they’ll go back to that level. There’s still a lot of demand for housing and THERE ALWAYS WILL BE! Anyone predicting a 40% decline is making a prediction because he earns money by making predictions!
Erica
San Diego California Dentists
The goverment should take draconian measures like a creating a repo market to hide bank losses ? Or maybe draconian measures like bailing out home speculators because they might incur a loss?
Isabel
San Francisco California Real Estate