Now that the election is over, what can we expect from the Real Estate Market?
The Real Estate market has led the economy out of the recession in the last two recessions. Will it happen a third time? My opinion is that it will happen, but it will take more than low interest rates. We have to lighten up the requirements for buyers so they can get loans. Not like we did in the past, where we gave loans to anybody who could sign their name. We need to bring back the stated income loans with excellent credit and a history of payments. There is a pool of buyers who can’t get loans because they show no income on their IRS 1040,s because they have their own business or work in a cash industry. These people can afford a home, but can’t get a loan. These are the buyers that need to get a loan.
In trying to correct our problems of the past we have over corrected and tightened up the lending market which is denying some good buyers loans.
It was consumer confidence that was the biggest help in bringing the economy out of the recession in 1995 and 1996. That is what it will take to do it again.
Many of the financial guru’s like to write their negative news about what they think will happen. We can do without these people. The market will recover a lot faster without them. What we need it a long period of sustained growth and we will be back to where we were. The last recession started in 1990 and started recovering in 1996. This recession started in 2007 and we should see it recover in 2013. That means values will be back to the levels of 2005. In the meantime we should see some good real estate years with values of properties being very stable. This is the kind of growth that grows consumer confidence.