If you have been watching the news this last week, you noticed there has been a lot of talk about our country's economic status. Federal Reserve Chairman Ben Bernanke gave an economic outlook for the next coming months: he pretty much stated that it is not going to get a whole lot better. The economy will still crawl along with slight growth, but there are still fears of negative growth in this first quarter of 2008. The odd thing is that that has been the statement for the last 2 quarters. But in spite of those predictions we have continued to post positive numbers. Now this weblog is titled "Local Inland Empire Weblog" so I will focus on local items, even though the national economy does directly effect us here. Home prices have dropped here in the Southern California region by about 21% compared to the same time a year ago. The amount of homes sold in 2007 also dropped by about 30%. This is not good news, so how is this mess going to be fixed?
First, the government has raised the FHA loan limits from $362,000 to $526,000. This number varies depending on the area in California. Higher loan limits mean that more home owners can refinance their homes to a more secure loan. It also means that home buyers can purchase a home with as little as 3% down. With these new loan limits we have seen the amount of Californians who can buy a home go from 25% to 33%. Simply put, more people can buy a home.
The second item that the government is doing to help the struggling home market is setting up more strict laws combating predatory lending. Thus, getting rid of most "exotic" loans on the market. People will have to come in with money down-not necessarily 20% but at least 3%. People are still worried about buying right now, but as I have mentioned before, there has never been a time when home inventory is up, interest rates are down, and home prices are down significantly.
The last item I will mention that the government is doing is speaking with lenders to help out struggling homeowners. Banks are suffering now also-it seems that almost every market is struggling. Every business has felt the negative effects of this market. I would like to end this entry with two questions:
Has your job been effected by this housing market downturn?
What do you suggest should happen to right this market?
Sincerely Kevin Williamson local REALTOR http://www.williamsonteam.net/
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