In December of 2007, I was telling my clients that our region was not affected by the housing crisis, as I have not been aware of any speculative investing during the past 5 years and 99% of the buyers I have served, utilized 30 year fixed mortgages for their financing. I felt that the sluggishness of our market and our bloated inventory was a direct result of the constant barrage of negative news articles fed to our population on the Nightly News, which left consumers staring into the heavens waiting for the sky to fall -- hundreds of houses going into foreclosure and being sold on the auction block --, "but lo! It's not going to happen". Because we have very little speculative buying and almost no high risk loans occuring, What is there to fear?
The error to my thinking is this: Although real estate is local, the mortgage business is not; so although we have very few foreclosures, the banking industry,in response to the huge number of defaults in other areas, has revamped thier mortgage guidelines, making homes more difficult to purchase and eliminating hordes of people from the marketplace, who under normal conditions would be qualified to purchase. " Why don't we just punish everyone, it's just too hard to identify the bad guys"
My current thinking is that the mortgage mess, coupled with negative media, and sellers still thinking it's 2005, are creating a tough market.
The silver lining I see is that our infrastructure is still sound. We are not going to have a rash of foreclosures and our region should be one of the first to recover.
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