Ed's Blog

It is with cautious optimism that I’m going to go out on a limb and say that the worst of the “housing crisis” or “mortgage meltdown” may be behind us. Now, the idea that we’ve seen the worst of the “credit crunch” is merely my opinion, but it’s based on the following observations which individually don’t indicate much, but collectively lead me to believe the market is beginning to stabilize.

*Bank Owned Properties, aka REO’s or Real Estate Owned Properties are beginning to receive multiple offers from interested buyers in some markets. These are properties that were repossessed by the lender, after the owners failed to make their mortgage payments. This is a good sign as it means that buyers and investors are coming back into the markets.

*Rates are holding steady. In fact, Jumbo Conforming rates (as I mentioned last week) are much closer to traditional conforming rates, opening a window for trade-ups, for new purchases, etc.

*Lenders are not taking as big of a write down as many had predicted. In fact, Freddie Mac recently revealed that although they did take a sizable loss of late, it was far less than they had expected to take.

*Lenders are starting to allow exceptions in underwriting, meaning that they will allow for certain “out of the box” exceptions to rigid guidelines. This is certainly the rarity, not the norm, but it’s still an indication that a bit of trust is being restored in the lending industry.

I’m not saying that we’re heading straight back to the top. We’re not. It’s going to take a while to get out of the pit we’re in, just as it took a while to get to the state we’re in. I’m merely suggesting that perhaps we’re not quite at the very bottom anymore, and we’re slowly beginning to see the light at the end of the tunnel.

Stay tuned!