Mortgage Meltdown

The mortgage meltdown has claimed its largest victim. Countrywide Financial, after being bailed out last year, is the latest to succumb. It will be assumed by Bank of America, and the buyout will be finalized later this year. 

This week The Closing Table is not about Countrywide or the tighter restrictions placed on potential mortgagors when looking to buy property. I thought I’d talk about optimism. Remember what it was like to get a mortgage ten years ago? Well, we’re pretty much there again. When you get approved it actually means you really are qualified to buy a house. One could say, these are a return to normal times. And with normal times comes optimism for a better future.

This year, we are already seeing excitement creeping back into the real estate market. Activity has been up in Truro and Provincetown. Buyers who have been spectator prospects for the past three years, are now putting themselves in the field and making the decision to buy. 

Although it is harder to get a mortgage and even the most seasoned mortgage brokers are sharpening their pencils, qualified buyers are recognizing that we are most likely at the bottom of the market. 

Even the so-called experts are saying that the first half of 2008 is the absolute bottom of the real estate crash. With mortgage rates recently decreasing, now under 6% for a 30 year fixed, qualified consumers are taking advantage of low listing prices and low interest rates. In 2009, this optimistic and toe testing consumer behavior, will turn into an all out feeding frenzy on low priced property, fueling buyer activity which will make the market come back with a vengeance.

This is an interesting prediction and one that I hope, proves to be true, for my clients’ sake, both buyers and sellers.