Today, we have entered into what I call the ‘Perfect Storm’ of Real estate where many factors have come together to cause this economic crisis that appears to have no end. 
The House of Representatives approved legislation providing help to struggling homeowners and more importantly liquidity to the lending giants Fannie Mae and Freddie Mac which was expected to renew confidence on Wall Street. It has not! The market dropped nearly 300 points the next morning (yesterday).
In fact, we have now watched Fixed rate mortgage soar today to their highest level in 1 year.
Most surprisingly,
The National Association of Realtor said existing sales resumed their decline in June after a slight rebound in May. The NAR Existing home sales declined by 2.6 percent in June, well beyond the 1 percent drop economists had forecast.
This is, how shall I say it, not upbeat news;
Typically, as home prices decline, sales will actually rise. (due to the cheaper bargain basement prices). This did not happen! and is is very shocking. And can only mean a likely a precursor to further and steeper declines in home prices or no sales.
It does not take more than having Internet access, network television or delivery of the Sunday newspaper to be aware of the fact that Real Estate is going through a difficult time here in Greater Phoenix and the surrounding towns of Scottsdale, Fountain Hills, Tempe, Peoria, Glendale, Mesa and many other cities in Arizona and unfortunately across many parts of the Country.
As real estate professionals, we cannot control the market. However, often have the task of being the bearer of bad news. And too often, people like to shoot the messenger.
If you are a real estate professional and your clients, friends and family ask. Do the difficult and be honest.
If you own a home and need to sell. Lower the price to where it needs to be.
If you cannot sell, speak with a lender to Re-Fi while rates are low enough to make a difference; And before credit lending standards become possibly more strict.
Homeowners may not love to hear it.
However, they will thank you later.
~~ James Wexler – Please don’t shoot , I am just the messenger
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Copyright © 2008 By James Wexler, All Rights Reserved. *Real Estate’s 100-year Storm*
Contact James Wexler (480) 221-8080 for all your Phoenix | Scottsdale area Real Estate needs
You would expect that cheaper home prices would allow more sales but the banks are making it nearly impossible to finance a home. For a Jumbo loan now most people will have to put at least 25% down on a home. On a 600,000 purchase that’s 150,000!!!! I can think of plenty of investments to stick that money into and collect a better rate of return. In the meantime, rent a million dollar property for for dirty cheap because someone needs help paying their mortgage. So hats off to the banks for putting homeowners into this mess and now turning their backs when we’re looking for ways out!
Yes, always good to be honest. Take a line from Warren Buffett and remember real estate as any investment should be long term. If the fundamentals haven’t changed (I think Phoenix still has a net influx of people) then patience will reward investors. People still need a place to live. And if I am not mistaken pricing has gone down to 2004? so if you have owned your home longer then you are still sitting nicely? Market timing never works for the majority. That is the message. And if people can’t get financing now, it is a chance to pump up their reserves and investments.