| The housing pendulum has swung in the other | | | | right now, buyers have the upper hand. They |
| direction and created a tough real estate market | | | | have more choices than ever. |
| for sellers. And home buyers are feeling the | | | | And this brings us to the root of today's housing |
| effects of tighter mortgage qualification. What will | | | | market woes. For sellers, the pressure from |
| happen now? | | | | more homes coming on the market, exacerbated |
| The Real Estate Pit And The Mortgage Pendulum | | | | by the sub-prime complexities, will force them to |
| What horrors await home sellers in the dungeons | | | | lower prices if they have no choice but to sell. |
| of the housing slump? | | | | Home sellers will also have to wait even longer for |
| News headlines bombard us daily about the plight | | | | their home to sell. I have seen sellers who just |
| of the real estate market and it's wide reaching | | | | break even on the sale of their homes and some |
| effects on the economy. You've read the stories | | | | make very little profit, depending on how long |
| of record numbers of foreclosures, the sub-prime | | | | they have owned their home. There are way |
| mortgage fiasco, and declining home prices and | | | | fewer home buyers these days. There is more |
| sales. There is even talk of a recession. | | | | about this at a website with free information and |
| What we all need to remember, however, is that | | | | resources that is helpful to both buyers and |
| most news reports that you read are based on | | | | sellers. |
| national housing information. As you may know, | | | | For home buyers it may seem that this is their |
| real estate is local and not every area of the | | | | heyday and super bargains are in the offing. To |
| country experiences what is presented by | | | | some perhaps, but to many, the mortgage |
| governments, associations, and media. Although it | | | | pendulum is severing their ability to qualify for a |
| is true that the housing market is in trouble just | | | | mortgage that would have been readily available |
| about everywhere in the country, the severity of | | | | to them prior to current day, preventing them |
| conditions vary by area. | | | | from buying a house or qualifying for refinancing. |
| Out here in the trenches of Richmond va real | | | | Although the Fed has made a big cut in interest |
| estate and surrounding counties, which can be | | | | rates and President Bush has approved the bailout |
| considered typical of many areas, we have seen | | | | of certain foreclosure situations, there is still one |
| home prices fall and properties are lingering on the | | | | part of the equation that is keeping the housing |
| market for months and months. Yes, things are | | | | market from stabilizing - tighter mortgage criteria |
| not good for home sellers here, but we are not | | | | by spooked lenders is preventing many ready and |
| facing armageddon, either. Houses are still selling | | | | willing buyers from qualifying for home financing. |
| and home buyers are still buying homes. It is just | | | | As often happens when a crisis appears, those in |
| taking longer to sell homes and the profits made | | | | control tend to overreact and enact regulations |
| on home sales have come down, but that is | | | | that send the pendulum swinging to the end of it's |
| because the prices of houses where highly inflated | | | | opposite arc before settling somewhere in the |
| just two years ago. | | | | middle as natural forces slow it down. Because |
| We're starting on the path of a corrected market. | | | | several large sub-prime mortgage lenders filed for |
| This is the case in many metropolitan areas such | | | | bankruptcy and the number of foreclosures is |
| as Richmond. But, before we will get back to a | | | | climbing, most, if not all, mortgage lenders have |
| normal real estate market, the momentum of the | | | | tightened up on their lending practices to the point |
| housing pendulum will cause the market to swing | | | | where many buyers can no longer qualify for a |
| towards the other extreme from what we saw | | | | mortgage who normally would have. And I don't |
| two years ago and put a deeper gash in the | | | | mean the high-risk borrowers that are now |
| housing market before it swings back to | | | | defaulting on their mortgages. |
| equilibrium. The question remains - how deep will | | | | Before the real estate market gets any better, |
| the pendulum's arc slice into the heart of real | | | | the mortgage pendulum needs to swing back |
| estate and how fast will it swing? | | | | down without creating a deeper gash in the |
| Things could get worse for both home sellers and | | | | availability of financing for more home buyers. Until |
| home buyers before they get better from what I | | | | banks and other lenders relax their criteria, the |
| am seeing out here in the neighborhoods and | | | | actions of the Fed and the White House will not |
| tracking the market. Sellers are facing even longer | | | | have a significant enough of an impact to turn the |
| selling times because of additional foreclosures | | | | housing market around. If the rate of the number |
| hitting the market and job relocations. Home | | | | of houses offered for sale continues to grow and |
| buyers are having a harder time qualifying for | | | | the pool of able home buyers does not keep |
| mortgages because of the sub-prime loan | | | | pace, conditions in the dungeon will only get worse |
| problems. It's a mess, no doubt, and we cannot | | | | as the pendulum comes ever closer with each |
| really be sure how painful it all can get for those | | | | swing. |
| having to sell or buy a home. | | | | Ciao for now,Bernie Rosellen, Your Agent In The |
| You can probably make as good a prognosis of | | | | Field Please keep in mind that my statements |
| your local conditions as any of the real estate | | | | above are based on my personal experiences and |
| pundits, maybe even better, from just knowing a | | | | observations around the neighborhoods of central |
| few stark realities. In order to survive the cuts | | | | Virginia. Some statements may not reflect fully |
| from the pendulum, sellers need to be realistic | | | | the situations, regulations and laws of other states |
| with their profit expectations. Your opinion on | | | | nor apply in all areas, so please see what applies in |
| what your house is worth is inconsequential. You | | | | your state (my disclaimer to keep me out of |
| will have to accept what buyers offer or not sell. | | | | Realtor Jail). |
| Home buyers are the market, not sellers. And | | | | |