The Beginning of the end?

Are we seeing the signs of the beginning of the end of the real estate crisis in the Reno/Sparks area?  An AP article out today titled Fewer people falling behind on home loans, suggests we might be. Today the government announced it’s throwing another 1.5 billion into the mix for the hardest hit states including Nevada.  The government also announced a new program called Home Affordable Foreclosure Alternatives (HAFA) to steam line the Short Sale process.

 

These are good signs but we have seen all this before. The government has been coming up with bailout programs and throwing good money after bad in an attempt to try and slow down the market free fall. 1.25 trillion spent buying mortgage backed securities keeping interest rates artificially low, billions in homebuyer tax credits, and billions more in bailout packages.  Mean while, prices continue to fall and home ownership rates are at the lowest levels in a decade. 

 

Look I’m no smart politician, noble prize winning economist, or Rhodes Scholar. I am just a real estate professional of average intelligence. I have been preaching to clients, friends, family, coworkers, and anyone else that would listen (you can read archives on this blog.) The only thing that is going to turn this mess around is home prices falling to a more affordable and sustainable level. After over 4 years of declines, we are finally seeing prices at levels that are affordable and sustainable for the long term. We still have many hurdles ahead including rising interest rates, stubborn unemployment, and foreclosures still coming. These issues will keep prices at low levels for at least the remainder of this year. Could prices fall further? Yes, but not at pace we have seen over the last few years. If prices do fall, it will be mostly confined to the higher end price ranges. 

Comments

[Janice Clark]

Good sign indeed. Or is it? Is the government really doing its part well? Btw, great post here! Very informative. Keep it up~