Feds Moving To Economic Recovery With Housing Market First
The annual convention for the National Association of Realtors (NAR) was held in Orlando this past week. I was unable to make it, but did hear from John Smaby, our broker/manager at Edina Realty - 50th and France, who was able to attend. John stated that of all the pertinent news and attention given to the housing market, the primary method the federal reserve intends to utilize in leading us out of the economic slump, is by doing everything they can to stimulate the housing market.
As we know, the housing market was the focal point that helped largely to bring about our economic difficulties in the first place (personal opinion: without going into the creation of, and problems with Fannie Mae and Freddie Mac, the serious repercussions - both pros and cons - of the Equal Housing Opportunity Act on lending standards, the tech bubble and crash of latter 1990’s and of course September 11th, 2001, all of which brought about the necessary massaging of housing interest rates, which largely drove skyrocketing real estate prices).
One of the proposals is the purchasing of distressed loans. Other methods will be for banks to reset interest rates on Adjustable Rate Mortgages (ARM’s) coming to term and moving large sums of money from the $700 billion bailout to banks (about a quarter billion of it).
Perhaps the most heartening news is that banks who have short-sale and foreclosure properties listed (and are notoriously slow or non-existent in replying to offers) are in the process of increasing manpower in order to deal with this entirely separate (and now quite large) class of distressed loans. The banks are now getting the picture and many intend to respond quickly to offers. This will certainly expedite the process of clearing short-sale and foreclosure properties from the market (they will never disappear altogether, as they have always - in smaller numbers - existed).
Clearing the majority of distressed properties from the market (locally and nationally) will be the largest step toward a housing market recovery.
ATTENTION: POSSIBLE FREE MONEY ALERT! Also, there is much speculation that they may make the first-time homebuyer (no purchase in the past 3 years) $7,500 tax credit (cash in pocket) a non-returnable credit. E.G., in it’s first form you had to pay it back over a period of 15 years, from your future tax returns (but with zero interest) at a rate of $500 per year. Now the speculation is that there will be NO PAYBACK.
Lastly, there is now further speculation of serious lowering of interest rates over the course of the next year.
I really think this next year will be very interesting within the Minneapolis metro real estate market, as well as nationally. Many areas will continue to decline, many will be flat, but some (Southwest Minneapolis, Lakes area of Minneapolis, Edina and especially East Edina) will be on for a moderate, solid year (historically speaking). In these prime areas, decent homes priced under the $600K price-point will do quite well. I believe homes above that price range (especially $750K and above) will have yet another tough year.
No matter how you look at it, the opportunites for great purchases at low prices with low interest rates will be fantastic. Now is a great time to be a first-time home-buyer, an investor, or a 2nd or 3rd-time home-buyer, looking to upsize your home.
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[...] unknown wrote an interesting post today onFeds Moving To Economic Recovery With Housing Market First - Zeb HaneyHere’s a quick excerptLastly, there is now further speculation of serious lowering of interest rates over the course of the next year. I really think this next year will be very interesting within the Minneapolis metro real estate market, … [...]
[...] In these prime areas, decent homes priced under the $600K price-point will do quite well. More [...]
[...] unknown wrote an interesting post today onFeds Moving To Economic Recovery With Housing Market First - Zeb HaneyHere’s a quick excerptI really think this next year will be very interesting within the Minneapolis metro real estate market, as well as nationally. Many areas will continue to decline, many will be flat, but some (Southwest Minneapolis, Lakes area of … [...]
[...] unknown wrote an interesting post today onFeds Moving To Economic Recovery With Housing Market First - Zeb HaneyHere’s a quick excerptI really think this next year will be very interesting within the Minneapolis metro real estate market, as well as nationally. Many areas will continue to decline, many will be flat, but some (Southwest Minneapolis, Lakes area of … [...]
[...] unknown wrote an interesting post today onFeds Moving To Economic Recovery With Housing Market First - Zeb HaneyHere’s a quick excerptI really think this next year will be very interesting within the Minneapolis metro real estate market, as well as nationally. Many areas will continue to decline, many will be flat, but some (Southwest Minneapolis, Lakes area of … [...]
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