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When Will We Return To a Normal Market?

Mortgage and Lending with RPM Mortgage Walnut Creek
When Will We Return To a Normal Market? First, we all have to recognize that a normal market is not what we have been in for a number of years. Widespread stated income loans, 100% and/or piggyback loans and many of the interest-only programs were not “normal” as few as five years ago. So, seeing these programs disappear can be viewed as “returning to normal”. What needs to return to normal is the ability of lenders to package and sell their loans on to secondary markets, giving them the liquidity they need to lend again. Second, therefore, we have to get through the credit industry crisis. Financial assets must be re-priced so that “unrealized losses” stop hanging over every financial business’ head. Third, demand must begin to return to the housing market, so that a floor can be put under home prices. “We believe that revived buyer confidence is paramount to getting the market moving again,” said luxury home builder Toll Brothers in its most recent quarterly financial statement. “Only when customers believe we are done with housing deflation will the excess supply clear and the market return to equilibrium.” That may be starting to happen. On March 25, the Wall Street Journal reported that efforts of lenders to clear foreclosed houses, among other factors, “are starting to drive prices low enough to attract some buyers back into the market.” The paper also cited data from the National Association of Realtors that found sales of previously occupied homes jumped 2.9% last February over the previous month. Buyers waiting for ‘the bottom of the market’ may want to start looking around.
Johnny Huang
Pleasant Hill, CA
Insurance and Real Estate Broker
I think once we see March's Local results in Contra Costa, we can better assess if the bottom is near. I'm pretty sure alot of buyers are getting off the fence due to the new FHA limits (for a limited time) but ther are lots of people that still need to be informed and educated.
Mar 25, 2008 05:43 PM
Ted Mackel
Keller Williams Realty Simi Valley - Simi Valley, CA
Simi Valley Real Estate Agent
NORMAL is a cycle on a washing machine.  That's about it!  The wacked out market of 2002-2005 isn't coming back either.  We're in a professionals market......Thank the Lord!
Mar 25, 2008 05:47 PM
Bill Exeter
Exeter 1031 Exchange Services, LLC - San Diego, CA
1031 Tax-Deferred Exchange Expert
We saw a slight increase in 1031 exchange business in February and our March results are looking pretty good, so I think we might have just passed the "bottom" of the market although we still have lots of dust that needs to settle.
Mar 25, 2008 05:47 PM
Dan Grammar
Realty Executives, Tucson Elite - Oro Valley, AZ
Professional Realtor - Tucson Arizona Real Estate

Buyer's are growing weary of sitting on the fence, IMHO, as well as they have begun to become a bit anxious with risks of rising rates.  The bigger problems, at least in our communities in AZ, still remains inventory.  When that begins to decrease, we will most assuredly see an increase in market stabilization.

'Just my two cents...I could be wrong. ;)


Mar 25, 2008 05:49 PM
Steve Snyder
RPM Mortgage Walnut Creek - Walnut Creek, CA
Dan - As inventories decrease, the market will start to normalize.
Mar 27, 2008 05:03 AM
Paul McFadden
Responsive Pest Control - Seattle, WA
Pest Control, Seattle, WA.

I would bet by next year. A market can only go so low and stay down so long!



Mar 27, 2008 11:16 AM
Benjamin Smith
Apex Appraisals & Consulting - Powder Springs, GA
Atlanta Area Appraiser

I am not so sure we will see a reduction in inventory for quite some time. My prediction is that as consumers begin to gain some confidence in the market and really start buying again, there will be a flood of new listings hitting the market from homeowners that were waiting for the market to get better before trying to sell.

Right now many people that want to sell their homes are scared that if they list now, they won't be able to sell within reasonable timeframes and if they do get an offer, it will just be low-balled by someone who is taking advantage of the buyers market.

I have seen an increase in activity over the past month but once the word really gets out, and believe me the media will let everyone know about it, we will actually see inventory levels rise, not fall. 

I will try to stay optimistic and say by this time next year we should be seeing the signs of a normal market returning. This summer should be quite interesting.


Mar 27, 2008 01:03 PM
Steve Snyder
RPM Mortgage Walnut Creek - Walnut Creek, CA


You're all right!

Mar 28, 2008 06:42 PM