I am officially convinced. The Home Affordable Refinance Program’s (HARP) 2nd coming will actually be productive. Well, to be honest it’s not me that is convinced: it is all my lenders. They are hiring underwriters like mad in an effort to staff up for the tsunami of applications they anticipate.
I was admittedly skeptical because, let’s face it, every government program aimed at fixing the housing market thus far has failed as bad as a LeBron to Wade late tie-the-game pass. (too soon?)
On that note, congrats to the West on their win tonight. Enjoy that and… I dunno. What else do Westerners enjoy? Overly twang-y music? Dry, arid summers? Cheap labor from illegal immigrants? Corn? The last two sort of work in tandem…
Anywho, this HARP thing is happening. There are still a lot of question marks surrounding the details of the program and how involved lenders will get. But if it comes out in the iteration that most industry professionals believe it’s going to come out in, there will be a mad dash for the door to get approved. So, if you or anyone you know is thinking about attempting to capitalize on it, call or e-mail me now. We’ll get your info loaded up so that the moment the floodgates open you will be as ready as humanly possible. Looking like mid-March is when we’re going to get concrete answers.
Europe continues to be a hotbed of issues. Every time that regulators and authorities come to some ground-breaking save-the-universe conclusion, everyone begins to question their ability to actually DO what it is the country in question says they’re gonna do. This constant lingering threat of gyro-flavored doom has kept investors on guard and in large part parked in safe havens like mortgage bonds. So, from a purely selfish perspective, yaaaaaaaaaaay for the awful fiscal policies of those blokes across the pond. Helping keep our mortgage rates nice and low.
Anyone from Europe I call a bloke. I know they all have their own countries and languages and heritages and all of that, I just don’t care. Deal with it. I’m just glad we’re not the financial pariah of the world anymore. There is nothing a geek loves more than and even bigger geek to distract the bullies.
Concerning real estate (as that is supposed to be the point of this entire newsletter), it’s kind of weird out there right now. Local realtors are seeing houses pop onto the market and have a double-digit number of offers in a matter of hours. In fact, looking at a macro level, the National Association of Realtors reported that the inventory of homes for sale has dropped to the lowest level since march 2005. Yet we’re not seeing house prices move north in an appreciable manner.
What gives?
The fact is, I don’t have a thrillingly good answer to that question. Could be the preponderance of distressed sales in the market as banks unload properties off their books. Could be the “shadow inventory” bleeding into the market and skewing statistics. Could be that all the demand is at the bottom of the price pool for homes. Could be that move-up buyers have been gridlocked into their current properties because they are financially underwater. Could be that us Floridians were hit particularly hard by the downturn and our recent surge in demand indicates that we’re at the forefront of the bounce off of the market bottom. Lots of theories floating around.
I do have my own theory about it, though. I’m a believer in the pendulum effect. Things go too far to one side and on the return trip they essentially skip the middle-ground and end up entirely too far to the other side with a lot of momentum to artificially hold there for a while. Things were excessively good for a while, now the opposite is true.
Think about it. Go ask John Q. Public how housing is doing and he’ll probably give you some sort of story about how so-and-so lost everything in real estate and is suffering because of it. But John’s talking about something that happened two years ago. Everyone is. But the markets aren’t concerned about two years ago. They’re concerned about the here and now.
And with all that negative sentiment floating around effectively keeping a lid on price appreciation and needlessly sidelining eligible buyers, foreign money and cash investors are snapping up properties at fire-sale prices. Doing it right in front of everyone and still going unnoticed. Because as bad as things are, owning a piece of America is still a smart long-term investment.
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