Friday, February 12, 2010

Some People

Well we are working our way through a tougher winter than expected. My saving grace has been appraisals as sales have been unusaly slow.
Our real estate market stalled in mid october last year and has only sputtered since. The interest rates are the lowest in history but I've never seen credit this tight. The lenders have put policies in place that eliminate most purchasers that would have qualified for a mortgage only 2 years ago. That is the reality on the ground and that means this is going to be a slow recovery and a longer down turn. It took us 35 years to get to 100% financing and 40 year ammortizations. Now because some financial cowboys in the US built a house of cards that collapsed we will be paying the price for years to come. Now even if the lender wants to do the deal the high ratio insurer is getting tougher. This is an obvious reaction to more and more foreclosures and them seeing more lossess coming down the pipe. Another big impact on the market is the banks utilizing appraisal management firms instead of the local lender being able to call a local appraiser. This results in erratic and inconsistant appraisal values especialy in rural areas where accurate comparables are unavailable and an appraiser unfamiliar with the area compensates by being overly conservative. The lender has lost the ability to call a local appraiser familiar with the area and thus is farther removed from providing the customer with the service and results the customer would like. Of course we all know the banks and government operate in similiar manners. Both spend a fortune advertising how much they do for us while in reality it is the opposite. All of these changes have combined to basicly kill the goose that laid the golden egg which was the housing market. I hear the stories and watch the news about the hot housing market in Canada. That's not here not now and I don't think we are going to see a hot housing market for a while. The tight lending policies and changes in the appraisal process have combined to elimate too many buyers from the market place. Some people will have to come too their senses before things are going to get better and I don't see that happening in the short term. I hope I'm wrong but it's time to prepare for the worst. Recovery in sight ? Bah Humbug the recession is just realy beginning. We've only seen the tip of the iceburg.


  1. Onward and upward. See the opportunity and not the problem...where do we go from here? There are still good people who want to buy but the problem is in the product they require in order to purchase...hmmm...? Possibility to fill a new niche?

  2. I'm thinking "Sell Your House For $999.00"
    We supply a CMA, sign, website and listing cut.If they get a buyer for another $500 we handle the deposit and draw up the agreement of sale.If their house doesn't sell we list it and credit any moneies paid towards the commission. What do you think ?