Real Estate Agent with Dunnigan, Realtors, Sacramento (916) 425-9715 CalBRE # 01188158

In a New York Times article today, a gentleman was quoted as saying "I have flirted with buying again many times over the past few years.  Let's face it; people are not rational creatures." It goes on to say "But he always resists, figuring housing is still overpriced, and even when it stops declining it will stumble along the bottom for years and years. He says there is plenty of time to get back in if he should ever want to."

At the same time, a summary of the recent California Association of Realtors Board of Directors 531st session paints a new reality we have yet to deal with.  At a time when the government is trying to eliminate Fannie and Freddie loans, they are also implementing  the Quality Residential Mortgage.   This legislation will require buyers to come up with 20% down and have a debt to income ratio of 28/36Loan terms will be shorter and credit will have to be stellarFHA is also trying to decrease the number of loans they are making. One of the ways to do this is to make qualifying even more difficult

What is the result of all of this maneuvering? Fewer buyers will be able to qualify for a loan. To entice buyers to purchase, home prices will have to go down.  This will increase the default  rate and increase the short sales and foreclosures.  Fannie Me is also proposing to decrease the loan limit by substantial amounts and many more buyer will not be able to qualify for a loan and buyers in high cost areas will have to come up with higher down payments.

If buyers aren't seeing the light now and purchasing, they may very well regret their delay in a few years.  We sound like a broker record, but the sky hasn't fallen yet and if you don't want to hit the wall, better get ahead of the rock!



Re-Blogged 2 times:

Re-Blogged By Re-Blogged At
  1. Charlene Hammontree 05/31/2011 06:44 AM
  2. Dan Edward Phillips 06/27/2011 02:37 AM
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Charlene Hammontree
616 Realty LLC - Rockford, MI
Meeting the needs of Buyers and Sellers in MICH

I so agree! This is the best time to buy right now! Even in Michigan! Thanks for the great post!

May 31, 2011 06:43 AM #1
Robert Rauf
HomeBridge Financial Services (NJ) - Toms River, NJ

I do think that people who miss out on this market will be kicking themselves in a few years.  yes I think we will see a stagnant period where prices dont move up, but as that happens - rates will rise as inflation kicks in.... So if you need a HOME, and plan on staying in that home for the long run, NOW IS THE TIME TO BUY... but if you think you will sell it in a year or two, you may be better off renting unless you are an experienced flipper.

May 31, 2011 06:47 AM #2
Michael Kitsch
Coldwell Banker - Katy, TX

Gee whiz.  Step away from the train wreck!  There is no THINKING to see here.  I hope someone will wake these people up! Gee whiz.  Thanks for the post! Gee whiz.  Wow. 

May 31, 2011 06:48 AM #3
Russell Lewis
Realty Austin, Austin Texas Real Estate - Austin, TX

These kind of folks are always on the fence about something and rarely just about real estate. Hopefully none of us are stuck wasting time with the "have to analyze the market to death and...still not make a decision!"

May 31, 2011 07:24 AM #4
Melinda (Mel) Peterson
Grants Pass, OR - Bend, OR
The Blessed Realtor - ABR, CRS

Paula ~ I was in DC a few weeks ago for NAR's mid-year conference, and the points you made were exactly the topic of conversation there.  It sure sounds like we are fighting an uphill battle right now.  Hang in there girl :)

Jun 02, 2011 04:38 AM #5
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Paula Swayne

Realtor-Land Park, East Sac & Curtis Park -Dunniga
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