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Recovery or Double Dip

By
Real Estate Agent with TIM LORENZ - Elite Home Sales Team DRE# 00919781

I was talking to one of the agents in my office and we were discussing the housing market were we having a recovery or a double dip in the housing market.  She has been an investor in real estate for most of here adult life and wants to purchase more properties but cannot.  That started me thinking which developed into the answer as to recovery or double dip.  See what you think.

  • It is difficult to impossible for non-salary employees or owner to get a home loan.
  • People who have lost their homes by way of foreclosure, or short sale must wait 2 to 7 years before they can get a loan.
  • The amount of the maximum FHA and VA loans has dropped more than $100,000.
  • Qualifications and rules have gotten much stricter to get a loan.
  • We have over 11 percent unemployment in my state and if we talk about the underemployed much higher.
  • The homes where owners are not in danger of default have little or no equity.

If we look at the list the number of individuals that are able to purchase homes is severely hurt and the pool of possible buyers is way down.  If we look at the people who may have the income to qualify they do not want to risk putting down a large amount or risk a further down turn.

Because the banks and the government have not found a way to include the maximum number of individuals that could afford to purchase homes at low risk I say we are in a double dip.  In fact, I think another factor is just around the corner and that will be higher interest rates.

Kathleen Vetrano
RE/MAX Gateway - Falls Church, VA
Helping YOU Achieve YOUR Dreams

Tim,  The Washington area numbers went up.  Nationally I know they have gone down.  There are so many facets in play here.  Interest rates will go up, the question is when.  There is a lot of money on the sidelines, banks and businesses alike.  Worker productivity levels are reported to be at their maximum.  I do think this is the double dip and with that, this may be the last time to buy at these rates and prices.  Once credit eases, demand for products goes up, companies need to hire to meet demand, those standing on the side lines waiting to buy a home jump in... the market and economy will move.  It has always been cyclical and it will change again.

Jun 26, 2011 06:54 PM
CA COASTAL ESTATES Lauren Selinsky Perez CRS
California Coastal Estates - Aliso Viejo, CA
"Your Real Estate Broker" #oclauren

Tim, there are so many options for Buyers and there are many new programs that are really helping out the Buyers in this market. Truly.

Jun 27, 2011 12:24 AM
Tim Lorenz
TIM LORENZ - Elite Home Sales Team - Mission Viejo, CA
949 874-2247

Kathleen

I agree with you and a lot ot the production people are doing much better making money but they cannot buy because of their circumstances.  Like foreclosure and short sale.  My friend and agent cannot purchase on her own because she does not qualify under full doc. requirements.

Jun 27, 2011 02:00 AM
Tim Lorenz
TIM LORENZ - Elite Home Sales Team - Mission Viejo, CA
949 874-2247

Lauren

There are wonderful first time buyer programs but not for anyone that has had their own company and is now not paying themselves a salary.

Jun 27, 2011 02:02 AM
Kathleen Vetrano
RE/MAX Gateway - Falls Church, VA
Helping YOU Achieve YOUR Dreams

Tim,  The pendulum has swung to the other extreme with credit and lending.  It really has put a strangling hold on so many.  Hopefully that will change soon.

Jun 27, 2011 07:14 AM
Tim Lorenz
TIM LORENZ - Elite Home Sales Team - Mission Viejo, CA
949 874-2247

Kathleen

Our economic recovery is to a large extent dependent on the state of the housing market and it needs to have someone in Washington trying to change the market killing rules and regs.

Jun 27, 2011 07:22 AM
Kathleen Vetrano
RE/MAX Gateway - Falls Church, VA
Helping YOU Achieve YOUR Dreams

Tim,  Agreed.  There is certainly a lot they can do.  In my own case, they lowered my credit limits to about 1/4 of what they were.  This in turn changed my credit score with used credit vs. available credit.  There are so many things going on here.  If I wanted to move or buy a home, my credit score looks very different now with no change in credit behavior.  And note, we have been with them for over 25 years.   Amazing. 

Jun 27, 2011 08:17 AM
Tim Lorenz
TIM LORENZ - Elite Home Sales Team - Mission Viejo, CA
949 874-2247

Kathleen

That was the point of my blog.  If we take your situation and all the others they are severly hurting the market and it will take 10s of years to recover.  If they leave it alone 2 years to have recovered.

Jun 27, 2011 08:25 AM
Joni Bailey
101 Main St. Realty - Huntsville, TX
Your Huntsville / Lake Livingston Area REALTOR®

It seems that we are likely to see more owner finance in the future!

Jun 28, 2011 05:17 PM
Tim Lorenz
TIM LORENZ - Elite Home Sales Team - Mission Viejo, CA
949 874-2247

Joni

It is unlikely that owner finance will work since the seller owes more than the home is worth.

Jun 28, 2011 06:20 PM
Lorraine or Loretta Kratz
Crescent Moon Realty, Inc. & Land N Sea Auctions. - San Marcos, CA
Certified Negotiation Consultants

Tim:

Here in the San Diego market, HomePath and HomeStep are offering some outstanding opportunities, with assistance on closing cost, and HomePath has a 3% down payment program. Having said all this buyers are still not stampeding to get these deals. "WHY" & this is only conjecture, on my part, buyers are still struggling &  do not have the where with all to afford a home, be it credit or down payment or job security. Many jobs that were in our area are no longer, the state of California is facing so many obstacles in trying to balance a budget that no one can agree on --- as they say the list goes on.

Jun 29, 2011 06:00 PM
Tim Lorenz
TIM LORENZ - Elite Home Sales Team - Mission Viejo, CA
949 874-2247

California is finding ways to seperate the average person from their money so that government can hae it to spend as they see fit.  If they take the money then there is less for the person to spend on food, homes, gas, and the like.

Jun 29, 2011 06:10 PM
Sidney Kutchuk - Realty Works Temecula Kutchuk - Realty Works Temecula
Realty Works Temecula - Temecula, CA
Realty Works Temecula

Tim:  How about a cyclical increase in the number of units sold.....I think reporting the "Number Of Units Sold", can put a positive outlook on the market....no one can argue wiith that....but I do find it interestingly funny that every June, reports come out stating that prices are up and every fall reports come out stating prices are down!  ....it's just the normal cycle completing the loop!

Jul 02, 2011 07:27 AM
Pamela Seley
West Coast Realty Division - Murrieta, CA
Residential Real Estate Agent serving SW RivCo CA

Tim, I agree we are in a double dip. IMO, prices will go down in the next several months. I like your comment that CA is finding ways to separate the average person from their money so that govt can spend it. So true! This creates an imbalance for people who are struggling with less income, job losses, higher gas and food prices. Why would any first-time homebuyer want to jump in now? IMO, this is the time for the real estate investor.

Jul 02, 2011 07:26 PM
Tim Lorenz
TIM LORENZ - Elite Home Sales Team - Mission Viejo, CA
949 874-2247

Jane

Units sold to tell a story but we need to look longer over years to know the true meaning of the numbers.

Jul 03, 2011 03:08 AM
Tim Lorenz
TIM LORENZ - Elite Home Sales Team - Mission Viejo, CA
949 874-2247

Pamala

If we were all clear on out need for jobs the rest becomes an argument on big government or small government.  We need to have people employed not hurt and hungry.  Jobs have to come from the private sector.

Jul 03, 2011 03:11 AM
Elite Home Sales Team
Elite Home Sales Team OC - Corona del Mar, CA
A Tenacious and Skilled Real Estate Team

I'm with you I see a double Dip not a recovery.   Too many things have to change.

Jul 03, 2011 10:09 AM
Tim Lorenz
TIM LORENZ - Elite Home Sales Team - Mission Viejo, CA
949 874-2247

We are in agreement here.

Jul 03, 2011 11:31 AM