Concerning yesterday’s abrupt and minimal posting, I was just trying to make a point. It seems like I have been talking a lot lately about the state of the housing market and how conditions do not look good. Despite low mortgage rates, buyers are still frozen in limbo by unemployment and other financial factors that just make buying a house right now not-such-a-good fiscal decision. SO, yesterday I was sort of at a loss. I didn’t want to continue on with my tirade about the collapsing housing market, yet I still wanted to illustrate to you the importance and magnitude of this current time in real estate. It really is a strange time to be a real estate blogger because so much is happening. There are folks out there working day and night planning legislation and looking at formulas to bring this real estate economy back from the brink of destruction. I just read an article today about a mortgage firm outright asking its employees, “How low must mortgage rates get before people start buying houses again?” Apparently, the 4.49% it’s at no isn’t cutting it, and that’s a record low. The general consensus was that 3% was an appropriate number to bring buyers back to the market. Those capable are doing anything in their power to save this industry and it’s crazy to think about how much is really going on out there, and how much is tied back to the housing industry. We’re battling unemployment—something the Obama administration has been struggling to alleviate. We’re up against credit crises and income inequality, rising costs of education, no jobs available for those who do have an education, over crowding in cities, factories shutting down in areas that solely depend on them to support its residents, and so much more fallout from this “Great Recession” that I find it astounding anyone is able to purchase a house at all. But they are still out there.
Yes, people are still buying houses, investing in real estate both residential and commercial, and not going completely under. If you want to look at the glass half full, ¾ of mortgages are not underwater, and mortgage rates are incredibly low. Officials and experts are trying to make it a viable financial option for people to go back into the market and purchase homes, so it must not be all bad. We have to trust them, otherwise it’s anarchy. What has changed? The reason behind buying a home has made a dramatic shift in ideal. Before, during the boom, you could buy a house just for the hell of it. It was only going to make you money. But now, people really have to take a great amount of consideration before they opt into a mortgage. The incentives are there. A 4.49% 30-year FRM is unheard of. But perhaps the timing isn’t so good. Perhaps there is financial instability a foot. Real estate isn’t just a willy-nilly barrel shoot anymore. There’s no tossing around toxic assets or subprime mortgages anymore—we know what happens. This time that we’re in right now, is just America starting to take real estate seriously. After all, it does constitute 10% of our nation’s economy.
