Since the official recognition of a recession we've been in supposedley since December 2007 ( like no one already knew that except for all the politicians) what has happened?  The stock market tanked immediately again on Monday ( how much did YOU lose trying to be optimistic from the Pre-Thanksgiving rally?), consumer confidence once again disappeared, and what few BUYERS for homes existed went hiding again.  This a crisis of confidence.  Something has to give the consuming public some hope for things to turn around.  I have said all along that mortgage lenders must step forward and boldly make special financing available NOW for qualified borrowers, and make it available for at least the next year.  I have been getting daily emails from various mortgage lenders who say the rates are in the mid fives right now, but "we don't know how long how long these rates will last".  No one seems to be getting those rates however.  Restrictions that even Warren Buffett could'nt qualify for as well as absurd down payment requirements, and low appraisal figures make these mortgages virtually non-attainable. 
FEAR HAS TAKEN OVER LENDERS!  The consuming public is not stupid.  They know what's going on, and they are more educated than ever. I have a very opinionated view that lenders largely got us in this mess and it is going to take a bold initiative on their part to get us out of this mess. Yes---greed and stupidity on the part of a lot of buyers who could not truly afford what they bought in the last six  years fed the frenzy in Real Estate.  The way it seemed was everyone deserved to live in luxury.  I guess that dream ( a bubble perhaps) has been burst.  Oh---but we haven't been in a bubble, right?  I know one thing---until the Real Estate market turns itself around, meaning balance in which reasonable buyers buy from reasonable sellers, this economy is going to stay in the tank.  I am a firm believer that the best way to get buyers to get back in the market is to give them a REAL INCENTIVE!  See my earlier blog on financing that will work!  LENDERS ARE YOU LISTENING?

With no capitulation in sight for realistic home prices in the Metro Area, about the only thing that is going to spur buyers to start looking for bargains is the availability of low mortgage rates. Lenders are kidding themselves if they think buyers are going to come back to  the same old mortgage products of the past.  Lenders have to take some risk, especially if the FED is more or less guaranteeing to take over the bad paper they wrote in the past.  Qualified buyers are too saavy now to fall into the same old line again.  Give them 5% 30 year mortgages with reasonable qualifications and down payment and they will return to the market.  Even then---most of them have to sell their existing home to do it!

The National Association of Realtors just released a quarterly report that shows data indicating that over a six year period the median increase in equity for 28 Georgia counties surrounding metro Atlanta was just 1.9%.  Most Realtors are in disbelief over this, but for those of us who have been in the resale market as listing agents, it doesn't come as a surprise.  The numbers have been skewed for a decade, by all the new construction that  has led the nation year after year.  Read it and weep folks!  It just goes to show what a difficult and important job we as Realtors have to correct the dismal numbers.  Sellers are in denial still about what they perceive their homes as really worth.  Buyers have the best advantage here in Atlanta than ever.   Where are they?

With all the attention on the recent National elections, we here in Georgia are most probably in for some unpleasant surprises when the Georgia legislature convenes in January.  Gov. Perdue has already said he wants to suspend property tax credits which will have the effect of forcing counties to raise property taxes to make up the loss of tax revenue.  Get in touch with your State Representatives and County Commissioners NOW and let them know that this is unacceptable. 

The government bailout package does not seem to be going where it it is needed most----the consumer!  Before long, all the intended funds are going to end up in the hands of large corporations seeking help.  Will they do the right thing or hoard the money? Until consumers have the incentive and confidence to invest in Real Estate, our economic condition will not improve.  What do you think?

What is it going to going to take to get people to start buying homes again?  That is the question that I am asking everyone I come in contact with these days.  The bailout plan is simply not getting the money to where it is needed most -- to the consumer.  I have developed a special mortgage financing proposal that I would like your opinions on.  It is not a bailout.  It is a plan to get qualified buyers back into the market now.  It is simple and straightforward.  It is based on 3%, 5%, 10%, or 20% down.  ABSOLUTELY NO 100% FINANCING OR CREATIVE WORKAROUNDS!  This will give buyers an incentive!

3% down minimum credit score 650  28% debt/income ratio----30yrs 5 1/2% with full pmi

5% down credit score 651-700  28% debt/income ratio---30 yrs 5 1/4% with full pmi

10% down credit score 701-750 28% debt/income ratio---30 yrs  5% reduced pmi

20% down credit score 751 and above  28% debt/income ratio---30 yrs 4 3/4% no pmi

This rewards buyers and charges a realistic market based interest rate that is what THE CONSUMER is looking for.  Now ---- will the lenders do the right thing!   That is the question.   Your comments and thoughts please.  Lets get the dialogue going and get the lenders in line.  It is our duty as Realtors to bring the market for homes back into balance.  Nothing will change in our economy until the Real Estate market corrects itself.  We propped up the economy after 9-11, and we can do it again!  Lets get the Federal Government and the Lenders to do the right thing!