Work for Obama to fix real estate market

Creative Commons License photo credit: FalkPhotoDesign
The new American government will have to work hard to free up access to loans after home sales fell, a real estate market expert has said.

Lawrence Yun, chief economist of the National Association of Realtors (NAR) also said he was not surprised transactions on existing homes sales were down.

Latest figures from NAR show deals are down 8.6 percent to a seasonally adjusted annual rate of 4.49 million units in November.

But the slow climate is not expected to last thanks to interest rates in the US falling to levels not seen for decades.

Mr Yun saids:

“It is imperative to provide incentives for home buyers to get back into the market.

“It also depends on how effectively Congress and the new administration can help facilitate the short sales process and unclog the mortgage pipeline.”

Leading lender Freddie Mac recently reported the 30-year mortgage rate had fallen to 5.19 per cent – the lowest on record since it began recording such figures 1971.

The NAR has warned red tape and confusion has meant successful home loan applicants waiting for the cash to buy a house have been delayed.

Although sales are slow overall, the group added there continues to be rising activity in California, Nevada, Arizona and Florida markets.

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4 Responses to “Work for Obama to fix real estate market”

  1. We have not seen the bottom yet.
    Natiowide stats are misleading because all regions/cities have their own very unique challenges. We should not generalize but the fact is that supply outstrips demand and this gap is growing as more properties come into the market and the number of buyers diminishes. The only thing that can adjust this market is a severe price adjustment . All other fixes are cosmetic and do not address the structural problems we now face.
    Yes, rates are low but financial institutions do not have a huge apetitite for risk in the face of more economic uncertainty. Why would you lend money to someone who may be losing his/her job ? Even if a buyer is willing to put 20% down , the mortage could be underwater if property vales are adjusted another 20%. We have gone from the sublime to the ridicule and let’s not kid ourselves.
    It took us over a decade to get where we are and it is going to take us quite a few years to untangle this mess.
    All in all, if you want to seet the rainbow …you have to put up with the rain…this storm will also go away. Let’s hope we can bring back a sense of rationality to the housing market.

  2. Why will it take years for the property market to get back on track? I hear this all the time – and everybody nods in agreement – like it’s a given.

    The road to recovery is based on first accepting that price correction is required, and then agreeing the correction level. The problem is that no one wants to loose – who would? But that’s what takes the time. It takes time to accept that correction is necessary and that there will be casualties.

  3. mlimberg says:

    Sorry homeowners, if you bought a home in the last 15 years, your value will likely take a hit.

    The only way this economy will recover is when afordability comes back. And that means that the old rules will need to apply, 20% down and a payment, including PMI< insurance and taxes of around 25% of gross income. Nad you will need to base this on a single income, and use a secodn income to pay it off faster. Right now, if the neighbors dog farts, and your bonus stops coming, you can’t make your current payment….

    Save money and pay cash…. you can really do it. Then the American economy will recover.

    And a word about Realtors, they need to go away. They are responsible for driving up the values of home for their won personal gains. I hoep they all go broke. YOU DON’T NEED ONE TO BUY OR SELL A HOUSE! All you need is a brain and a title attorney….

  4. I am not quite sure what to think. Two years ago we had interest rates below levels seen in recent years, that drove the market up high. now interest rates are even lower, but there are no loans available. What are we to think about this real estate market? I am not sure we will see much of a difference from one president to the next. I hope I am wrong. Best of luck to Obama with this mess Bush is leaving behind.

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