Home Buddies Quarterly Economic Report - Part 3 - Opportunities
The past few weeks we have looked at an overview of the U.S. economy as a whole. Now we will look at what is likely to unfold in the mortgage and real estate markets next year. Then I will go over some opportunities that come up in this stage of the real estate cycle.
Credit Markets & Lending
At the end 2008, probably the biggest news is the determination of the Treasury and the Fed to try to push mortgage rate lower. Six hundred billion dollars of Fannie and Freddie mortgage-backed securities and unsecured debt are to be purchased by the Fed according to their November 25th announcement.
Whether the government will be able to accomplish it or not, the idea is to lower the cost and improve the investment of financing a property. The goal is to decrease debt costs to put potential investors or retail buyers with good credit back in the market to stabilize the economy.
Investors have always had the role of stabilizing property values after every bust and this cycle is no different. When investors and retail buyers begin to buy up property, values will start to recover which helps the banks' balance sheets. The good news for loan officers is that the cycle so far has been pretty predictable and we have long been anticipating a new refinance boom that usually comes after federal manipulation.
Real Estate Markets
Here are a few things to look into for Houston. Markets like Houston have been running against the national economic trend, but even in Houston permits are starting to slow. If there is a continued slow-down in housing permits, we may be in it for the long haul.
Layoffs will be the biggest indicator for Houston for next year. If there are massive job losses then the already fragile market could see a big setback.
Opportunities
Fear in markets leads to an over-correction and there may never be a better time to buy property in Houston - if you have good credit. In otherwise stable markets like Houston, fear is causing prices to move below what Houston's economic indicators should warrant.
Lastly, with the current credit standards, many buyers (including many investors) are no longer able to get financing for single family homes. Now there is an opportunity for investors with good credit (or those with other financing options) to buy investment real estate at below-market prices.
Credit Markets & Lending
At the end 2008, probably the biggest news is the determination of the Treasury and the Fed to try to push mortgage rate lower. Six hundred billion dollars of Fannie and Freddie mortgage-backed securities and unsecured debt are to be purchased by the Fed according to their November 25th announcement.
Whether the government will be able to accomplish it or not, the idea is to lower the cost and improve the investment of financing a property. The goal is to decrease debt costs to put potential investors or retail buyers with good credit back in the market to stabilize the economy.
Investors have always had the role of stabilizing property values after every bust and this cycle is no different. When investors and retail buyers begin to buy up property, values will start to recover which helps the banks' balance sheets. The good news for loan officers is that the cycle so far has been pretty predictable and we have long been anticipating a new refinance boom that usually comes after federal manipulation.
Real Estate Markets
Here are a few things to look into for Houston. Markets like Houston have been running against the national economic trend, but even in Houston permits are starting to slow. If there is a continued slow-down in housing permits, we may be in it for the long haul.
Layoffs will be the biggest indicator for Houston for next year. If there are massive job losses then the already fragile market could see a big setback.
Opportunities
Fear in markets leads to an over-correction and there may never be a better time to buy property in Houston - if you have good credit. In otherwise stable markets like Houston, fear is causing prices to move below what Houston's economic indicators should warrant.
Lastly, with the current credit standards, many buyers (including many investors) are no longer able to get financing for single family homes. Now there is an opportunity for investors with good credit (or those with other financing options) to buy investment real estate at below-market prices.
About the Author:
Home Buddies is a Houston Credit Repair Coach for business and investors in real estate. Home Buddies' Credit Coaching Program takes clients through the process of restoring credit and overcomes the obstacles to financing properties and growing a portfolio.
posted by Debt Consolidation Loan at
3:14 AM
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