As I am sure most everyone knows that there has been a major downturn in the local market over the past several months as evidenced by the extended time on market of currently listed homes. But there may be hope in the near future. Phones at the office have begun to ring in the past few weeks and our office has more properties under contract than I can remember seeing all summer. Add this to all the buzz about the Federal Reserve contemplating lowering interest rates at their September meeting and we may begin to see things turn around.
This is all great news but the reality of it all is that the interest rates have not really changed much over the past two years. Yes they have increased but they are still hovering around all time lows. My view is that the banks are to blame for the current state of the market. For years they would give a loan to anybody who could make it through their doors. I don't know about you but I think that a payment on a $300,000 loan should be a little more than $100. Okay, that is a little extreme but I know that each one of you has received a flier in the mail advertising some extreme loan like this. The banks had to know that foreclosures woud go up so why would they do this to themselves.
Hopefully the above example is a thing of the past but a real estate goes in cycles predatory lending is sure to make a comeback!