With the news from TV and Washington all over the place, what's really happening in our local Atlanta market? The following is strickly "my opinion" and not a scientific study by any means: TV says homes are selling again! Well, yes.......and no. I am having a very nice increase in homes sales which should be good news. BUT....I am only selling foreclosed homes where the value is obvious, which does not help the average homeowner at all. In fact it hurts the average homeowner becaue it shows how much value is being lost. I'm talking about homes that sold for 160-170k when built just a few years ago and I'm selling these for high 60's now!! I also just sold a home, a builders model, never lived in, that was supposed to bring 368k. It sold for 215k. So, do not feel so good about the increase in home sales. This is not good for anyone except those who are buying at these prices!

Trulia just released a study on price reductions on listed properties in major cities across the US. Not a pretty picture at all. The Atlanta market did manage to rank only 30th. But they still are seeing 25% of homes listed reducing the sale price, trying to get a home sold. And the average reduction is 11%. I'm not talking about getting a home sold for 11% less than sale price, I'm talking about an 11% reduction to try to get an offer on the home! This doesn't consider that the majority of these homes will reduce their price further to accomodate the buyer. With most agents informing the sellers to expect lower prices, most of the homes are low priced when they go on the market, so another 11% reduction just to try to get an offer is a real killer.  

Speculation is ongoing that many homeowners are withholding their house payments on purpose!! It seem with all the current conditions it may be that some owners are stalling on purpose. Why?? Well, there are many reasons.

1. Fear of losing their job.

2. Falling home values leaving them upside down.

3. Fearing if they are current on their payments they may not qualify for goverment assistance.

4. People who are current are getting no concessions from their lenders.

5. The decreasing stigma of defaulting on their loan, if GM can do it, why not me?

6. Uncertainty on the future of the economy in general, is it going to get worse than now?

While I do not advocate this, I can certainly understand some people are choosing to withold their payments.

Well, the good 'ole US Govt is on a roll. Last week the President proposed more sweeping changes in government regulation. They propose creating  an independent and powerful "Consumer Financial Product Safety Commission" to regulate financial products such as mortgages and credit card. Now, I do not know about you, but I have very little faith in the government's ability to meddle in any business. Just look at some of the businesses they have meddled in, railroads and postal service for instances. Not exactly success stories! And they have a large portion of the blame for the crisis we are now knee deep in. The government complains bitterly about the subprime loans that were developed in the '90's and grew to terrible proportions in the early 2000's. Yet, it was Barney Frank and the banking committee who got the ball rolling to begin with. They complained and finally got Fannie Mae and Freddie Mac to lower the standards for home loans citing the lack of ethnic people's able to qualify for home loans. Once Freddie and Fannie lowered their standards, the rest of the mortgage industry had to get on board or be crushed by these quasi government entities. So, we ended up giving 100% loans and low interest rates to less than qualified borrowers. I can't wait to see what this new "Commission" comes up with to "help" consumers with new mortgages and credit cards. It scares me to death!!

Quality homeowners and taxpayers are bristling at the goverment funding of new home buyers. They did not get any help buying or keeping their homes and yet their tax money is going to assist first time home buyers to the tune of $8000.00 each? Now the goverment is even allowing first time home buyers to apply this $8000 to their cost at closing making it a virtual 100% mortgage. Taxpayers cry that 100% loans were part of the reason the housing market got into trouble in the first place. Homeowners scream that they have seen their home value slide to where they are underwater and therefore cannot qualify for refinancing to the lower rate of 4.5%. If they can make their payments at 7% rate, it is a sure thing they could make their payment at 4.5% rate. But, No!, they cannot qualify for a refi!! Something is definitely wrong with this picture!! 

I cannot believe there has ever been, or perhaps, will never be, a better time to buy a home.  With all the foreclosures on the market and the pressure that puts on normal home prices, homes are more affordable, to more people, than ever before, interest rates are unbelievably low and you may get goverment assistance of $8000. If you have ever considered buying a home, you should be making the move now! We may never see this opportunity again, why not take advantage of it?? Interest rates are already starting to creep up, the goverment programs are set to expire in November, now is the time to act!!