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Predictions for Residential and Commercial Real Estate

Take plummeting house prices, mix in an unprecedented number of foreclosure and short sales, sprinkle in a more restricted ability to obtain loans and then combine all of that with a weakening economy and you have a recipe that has made 2008 one of the worst real estate years on record.

Unfortunately, the sentiment out on the street is that 2008 may have been only an appetizer for 2009. The Wall Street Journal recently put together an article that sheds light on what might be coming down the pipeline for both residential and commercial real estate.  Here are some of the highlights:

Residential

• Some experts predict that trouble in the residential real estate sector is expected to continue.
• Many are urging the Obama administration to push for broad programs to limit foreclosures, stimulate demand for homes, and stop the slide in prices.
• The Treasury Department is considering Read more

Mortgage Rate Update Ending 01/14/09

Bankrate.com  conducts a weekly national survey on the interest rates for the five most common consumer banking products.  Here’s this week’s outcome:

• 30 Year Fixed Rate: 5.28 percent with points averaging: 0.42
• 30 Year Fixed Rate Jumbo: 7.07 percent
• 15 Year Fixed Rate: 4.89 percent
• 5/1 ARM (Adjustable): 5.51 percent
• 1 Year ARM (Adjustable): 6.13 percent 

Fixed-rate mortgages continued their decent toward record lows this week.  Refinancing activity was at levels similar to those found back in mid 2003. Activity increased 25.6% from the previous week.

Foreclosure postponements for Fannie Mae and Freddie Mac borrowers have been extended for an additional three weeks. The postponement should be valid through January 31.

As the economy worsens, more foreclosures and short sales will continue to drag home prices down.  The main culprits creating a worse housing condition are the poor economy and subsequent rising unemployment.

Hidden Amongst the Doom and Gloom, Signs of Hope for Housing in 2009

I have three words for you – mortgage interest rates.  This item has offered a glimmer of life amid the constant bombardment of painful and negative news about the economy and housing market.  The central entities directly impacting mortgage interest rates are Capitol Hill and in particular the Federal Reserve.  The Fed is taking an unprecedented commitment to restore the credit markets and promote an economic recovery.

In December of 2008, the Fed performed two moves.  They dropped its target rate to close to zero and committed to buying quantities of bad mortgage securities. These two moves are starting to have positive signs to the functionality of the market. The most obvious over the last month has been the impact to Read more