03 Apr 08 A Changing Market

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Real estate experts are suggesting that the housing market around the country is less than two years away from a turnaround. Now I know that everyone has heard this before, but the statistics now show that this may be true. Recently released from the California Association of Realtors, are some facts that I think everyone should know about Orange County real estate buyers and sellers. With the current changes to the lending practices and available jobs continuing to increase, it is believed that the mortgage crisis may be coming to an end or at least beginning to stabilize in Orange County and the rest of the United States real estate market.

• The Federal Reserve has reduced its lending rate six times since September, and did so twice in January by 1.25 percentage points. On March 18 the Fed made another cut of three-quarters of a point.
• With more homes on the market for longer periods of time, buyers have more choices and leverage when choosing a home in today’s market.
• The foreclosure crisis has motivated the government to create more consumer protections against predatory lenders. This led to the drafting of several bills in the works that will make a significant difference in future lending.
• A temporary increase in the conforming loan limit means consumers will be able to borrow money at lower interest rates even for higher priced homes. Prior to the increase, the conforming loan limit was $417,000.

Tags: california association of realtors, California Real Estate, federal reserve, foreclosure, housing market, interest rate cut, Orange County real estate

28 Sep 07 Recent Rate Cut - Will it be enough?

As you know, the Federal Reserve recently implemented a ½ point rate cut in an effort to stimulate our slowing economy. The fed mentioned that a major factor in our weakening economy is the real estate slowdown and the domino effect that this slowdown is having on related industries. The rate cut is expected to boost consumer confidence, consumer spending and decrease credit related monthly payments for many Americans, but will it be enough to stimulate new home sales? Will the rate cut have a significant effect on our nation’s real estate market? How much will it affect the Arizona real estate market?

The rate cut will most likely increase home sales some, but I’m not convinced that rising interest rates are the only reason why many people are not buying. Aren’t several people canceling? Aren’t many waiting to “know” when things can’t get worse?

In addition to rate cuts, I think the Fed should somehow reward responsible creative lending practices with lower borrowing rates. Regardless, the national attention and recent actions by the Fed give me hope that, in time, our nation’s real estate market will once again be robust. After all, it is the best time to buy! Any thoughts on what else we can do?

Tags: borrowing rates, federal rate cut, federal reserve board, home sales, interest rate cut, Real Estate, real estate market