Home Buddies Economic Outlook 3 - Credit and Investor Opportunity
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.
Mortgage Markets and Credit
Perhaps the greatest news leading into 2009 is the commitment by the Department of the Treasury and the Federal Reserve ("The Fed") to achieve lower mortgage interest rates. The fed announced on November 25th that it would purchase $600 billion in Fannie Mae and Freddie Mac mortgage-backed securities and unsecured debt.
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.
The Real Estate Markets
If housing permits continue to slow, it may be some time before the real estate market improves in the US. Keen an eye on a few things in Houston however. Some cities (including Houston) are still countering the global economic trend. However, even in Houston, permits are starting to slow which may lead to a retraction as we move into next year.
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.
Investment 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.
In addition, with lending standards still remaining tight, many buyers are unable to credit-qualify to purchase a single family home. This is creating, and will continue to create, a great opportunity for savvy investors to pick up investment properties at undervalued prices.
Mortgage Markets and Credit
Perhaps the greatest news leading into 2009 is the commitment by the Department of the Treasury and the Federal Reserve ("The Fed") to achieve lower mortgage interest rates. The fed announced on November 25th that it would purchase $600 billion in Fannie Mae and Freddie Mac mortgage-backed securities and unsecured debt.
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.
The Real Estate Markets
If housing permits continue to slow, it may be some time before the real estate market improves in the US. Keen an eye on a few things in Houston however. Some cities (including Houston) are still countering the global economic trend. However, even in Houston, permits are starting to slow which may lead to a retraction as we move into next year.
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.
Investment 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.
In addition, with lending standards still remaining tight, many buyers are unable to credit-qualify to purchase a single family home. This is creating, and will continue to create, a great opportunity for savvy investors to pick up investment properties at undervalued prices.
About the Author:
Home Buddies is a Houston credit repair coach for real estate investors. Home Buddies develops and implements a customized strategy to restore credit and creates a business development strategy to help them overcome obstacles to financing properties and growing their portfolio.
posted by Debt Consolidation Loan at
4:57 AM
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