Scary News from the Trenches

Well Folks, the times they are a changing and so must we. It's hard to turn on a television or radio these days and not hear tons of doom and gloom about the housing market. The big news has been that Subprime banking giants like Fremont Investment and Loan and New Century have ceased to do business. How does this news impact you? How does this news impact me? Well for starters this means that there are less players in the market competing for business and that usually spells higher rates for consumers since there is less competition. Within the last 5 years one of the largest segments of lending involved 100% financing and now this financing will be very difficult to obtain and therefore more costly to the consumer. The trickle down effect is that there will be less buyers that can purchase homes and more sellers trying to unload their homes. Many sellers who had bought within the last 5 years had done so with the assistance of 100% financing and now that the real estate market has taken a downward turn these sellers may not be able to sell their homes for what they had paid. If sellers can't sell and many buyers can't buy then we will all have a very real and frightening problem. My prediction is that we will start to see many more foreclosed properties even in solidly middle and upper middle class neighborhoods. Still all is not bleak for there are always silver linings amongst the clouds for some. As I said in my Newday interview( Business Section page A49 and A50) yesterday with Jim Bernstein "It just depends on how you position yourself". Money is made in all kinds of markets if you educate yourself and position yourself to work with knowledgeable people who will have your best interests at heart. As a Realtor who represents buyers exclusively, I am really looking forward to this brave, new marketplace. Buyers who are smart enough to hire us will be able to get some really good deals on homes and not have to worry that they will be overpaying. Welcome to the new Buyer's market!