Part 1 of 4

All around we are bombarded with the information about "doom and gloom" of our housing market and the financial fiasco of the banking and lending giants. The very first question which comes to my mind - why all of these "news" are suddenly showing up now and with such urgency attached to them? What happened in the meantime? How come we haven't heard anything about it in the previous months?

 Being a Realtor I understand the "seasonal fluctuations" in the housing market. Summer months are usually most active and then slower period comes because of holiday season and winter months. And this cycle repeats itself every year. Nothing new...The law of supply and demand takes care of the market's self-balancing, hence, we have either Buyers or Sellers Market.  And that also happens every few years. Real estate values go up, up but they cannot go up, up forever. Simply said, what goes up will have to go down. But it doesn't mean that it will stay there, does it?

From 2001 to 2005 property values rose up in unprecedented speed of almost 58%! That is a huge value gain comparing to the historical value of 4% annually. Then what has happened, what triggered this unbelievable gain? Are we really that surprised? Irresponsible lending, "lier loans" known as "no documents" loans where applicants lied on their applications about income, were not required to provide tax returns etc. Then these loans were packaged and re-packaged and sold for profit with help of the "cooking books accountants". Guess where the majority of these loans defaulted? Yes, you guessed it - California, Arizona, and Florida...all of most distressed markets!

What is the point I am trying to make, you ask? Well, it is not our economy at fault! It is reckless borrowing - both on government and individual levels -which are a drag on the economy! It is time to stop "golden parachute" and stop rewarding bad behavior and performance by people who got us into this unbelievable mess! Stock market didn't tank, our 401s are safe and the unemployment rate is very low. We will recover. This is the American way. More and more people are getting involved in the political process and more aware about giving blank checks to our politicians.

But there is a story emerging behind the headlines. "Amidst fears of financial freefall, the real estate market is emerging as a bright spot. Indicators are pointing to an end of the bust; in fact, real estate may be poised for a bounce"- writes Dave Jenks, VP of Research and Development for Keller Williams Realty.

                                                        Is Housing Headed for a Turnaround?
                               Home prices falling back into alignment with historical trends

  

 Source: Keller Williams Realty

The long-term affordability trend of 4 percent appreciation has been recovered after a five-year period of unsustainable growth (2001 to 2005) followed by a three-year market correction (2006 to 2008).

In the part2 I will introduce the Oklahoma real estate market - if and how it is affected by the national news; statistics of Oklahoma City market and is a right time to invest in home ownership or real estate investment...

I would love to hear your comments and questions about this article and real estate in general. 

Please send them to: Bo@Okla-OK.com

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