The Real Estate Sky is not Falling!!!

Oct
8
The Real Estate Sky is not Falling as the Media Outlets try to Portray.
Posted by Josh Schlesselman under For Buyers, For Sellers, For Realty Professionals, General Information, Bailout

With the recent passage of the enormous bailout from the government in the tune of 700 Billion dollars, many analysts believed it would be an immediate fix for the lack of liquidity in the market place. In consequence, the stock market has seen historic drops and closes within the last couple of weeks. It’s been a very volatile time for the stock market, but does that theory carry with Real Estate????
The answer to that question is a resounding “NO!” Many people outside the real estate industry are telling people that now is not the time to purchase, and that obtaining financing today is not the right move for you. Fears have been spilled into the marketplace, and consequently, it’s making it more difficult to correct the abundance of listings that are currently available, making the longevity of a market correction and turn around farther out of our reach.
What these so called ‘Gurus’ don’t understand is that if a buyer has stable employment, good credit, and some money for downpayment and reserves, along with a good reputable lender offering a solid 30yr. fixed rate loan program that the buyer can obliviously afford, it’s a fantastic time to purchase!!!!
Nationally, we have about a 5% foreclosure rate. Out of those, the majority of the people could either, not afford the mortgage with anticipation of reselling the house and pocketing the profit with appreciation, or wound up with a loan that does not have a fixed interest rate, but actually one that readjusts depending on where the prime rate floats. So if they started out with a teaser rate of say 5%, and with an adjustment of 1-2% a year, their rate could possibly go from 5%-7% in a year! If they have owned the property for say 3 years, their interest rate could have adjusted from 5%-11%. That’s almost double what they were paying to start with, which is a reason some of these adjustable rate mortgages or ARMS are so dangerous and have caused havoc in our industry.
On top of the silly loans that were issued, lack of government oversight to the practices of the evil and greedy lending institutions that gave these loans made matters worse. If there was proper regulation and oversight, they would have never given these crazy loans a second thought, and we wouldn’t have the mortgage meltdown we are seeing now. Am I for the government bailout? The answer is “Not Really.” The reason being is that 700 billion is a lot of money. That would equal about 400K for every household in the country! Why don’t they bail us out??? I mean, if we are just handing out money, hand it out to the people that need it most, the ones of us that were misled by greedy lenders that wanted to make bonuses on selling these stupid loans. Going back to the bailout, I am for bringing more liquidity into the marketplace. I believe however, we could’ve achieved that in alternative means, such as lower the capital gains tax, corporate tax, and other taxes that would give incentives for money to begin to flow again. Even if we couldn’t go that route, the bailout would have served a purpose if it had not been filled with Pork and wasteful spending to get the House and Senate to actually vote for it. Tax breaks for Wooden Arrows???
Getting back to the point of issue, don’t believe the media. They are in the business of making news, and there is no news, like bad news! Buying a house is the American Dream, and as long as you purchase a home, and plan to live it in for the next 3-5 years and with the criteria I have already gone over, you will be thankful you got into the market and got a great deal. Hampton Roads Virginia is one of the best and most stable real estate markets in the country due to our enormous military presence.
Check out my website at www.JoshSellsVirginia.com for more information and market updates.