Qualified Buyers Not Buying?

By
Real Estate Broker/Owner with Liberty House Realty LLC

A recent AP/AOL poll released this week shows a shocking and almost disheartening reflection of America's willingness to purchase a home. The poll recognized that over 60% of qualified home buyers said that they will not purchase a home in the next 2 years, up from 53% just two years ago.

The biggest reason that the poll identified as to why these qualified buyers aren't buying is because that can't afford the loss on the home they are in now. So, let me put this into prospective for you.

First of all, the country is currently going through a credit crisis. People can't get credit because banks and lenders tightened their standards for lending due to the fall of the sub-prime market. This credit tightening / crisis knocks out a lot of potential buyers who have fair to relatively good credit. To make it simple, for many people having "good" credit isn't enough to buy a home.

Secondly, the prime market is taking a huge hit with the fall of the sub-prime market. We are now seeing banks refuse to do Home Equity Lines of Credit (HELOC's) or at the very least, lowering the available credit for those who already have HELOC's. In worse case scenarios we are actually seeing banks dropping the HELOC credit line below the amount of credit already spent by the homeowner and are now calling the HELOC's in for payment. Make no mistake, if you have a HELOC and your homes equity can't substantiate the amount of credit your originally received, your bank will drop that credit limit or even stop the HELOC all together. As you can imagine, this has a drastic effect on the housing market. Homeowners now can't rely on the sale of their property to pay off the debt of the HELOC, let alone have money for any down payment on the next home they buy.

Thirdly, energy prices are hitting everyone in the pocket book. The simple fact is, we are seeing food inflation rise the fastest than at any other time in the past 17 years, soaring gas prices on the market for the past three years have seen an increase at the pump on an average 25-42% annually, the weakening dollar against foreign currency is causing inflation fears to run rampant and last but not least, continuing rate cuts by the fed's have seen no real impact to the individual consumer, all adds up to a worsening market than any of us could have imagined.

Make no mistake, homes are selling however, for many of those sellers, they are taking a hit on making a profit, if they make a profit at all.

Good luck God Bless.

close

This entry hasn't been re-blogged:

Re-Blogged By Re-Blogged At
Location:
Tennessee Davidson County Hermitage Ridgemere

Post a Comment
Spam prevention
Spam prevention
Show All Comments
Rainmaker
341,571
Eric Reid
Renaissance Realty Group of Keller Williams Atlanta Partners - Lawrenceville, GA
real estate is local.. I avoid buy into these nation polls .. real estate is local and in todays market more so
Apr 14, 2008 02:24 PM #1
Rainmaker
1,469,968
Donna Harris
Donna Homes, powered by JPAR - TexasRealEstateMediationServices.com - Austin, TX
Realtor,Mediator,Ombudsman,Property Tax Arbitrator
I didn't realize the banks could adjust HELOCs when they've got an agreement with terms signed by both home owner and the bank.  Crazy...
Apr 14, 2008 02:28 PM #2
Ambassador
517,005
Pam Dent
Gayle Harvey Real Estate, Inc. - Charlottesville, VA
REALTORĀ® - Charlottesville Virginia Homes / Horse
Its a scary world out there right now.  Unfortunately a lot of people are being hurt by this economic situation.  All we can do is stay positive, work smarter, and try to help the people that we can.
Apr 14, 2008 02:29 PM #3
Rainmaker
141,171
Linda Lipscomb
Linda Lipscomb RE/MAX Lexington Henderson County TN - Lexington, TN
731-695-1118, Lexington TN Homes

Times are tough, people are scared to commit.  They are not certain they will have enough money for the basic needs, as the prices continue to rise.

Apr 14, 2008 02:56 PM #4
Rainer
7,224
Carrie Heath
REMAX Affiliates - Chippewa Falls, WI

I looked at the price of eggs, milk and bread this week with relation to a year ago and you know what?  I am not at all surprised taht people are tightening their belts.  Gas prices don't just affect our price at the pump, but all aspects of our lives.  Many buyers are looking at their current cost of living and freaking out, and therefore not buying.  I know I am feeling the crunch, and I make really good money (for now).

Apr 14, 2008 03:00 PM #5
Post a Comment
Spam prevention
Show All Comments

What's the reason you're reporting this blog entry?

Are you sure you want to report this blog entry as spam?

Rainer
23,317

Liberty House Realty LLC

Turning the American Dream into Reality
Ask me a question
*
*
*
*
Spam prevention

Additional Information