Posted on: 12th Feb, 2009 12:02 pm
We are decidedly in a new season. Barack Obama is our President, “bailout†is the buzzword in Washington and throughout the entire country, folk are up in arms about the bonuses “earned†by bank executives, Wall Street executives, auto industry executives, ad nauseam.
We heard that interest rates would be reduced drastically in order to stimulate our economy. Although there has been a dip here and there, we haven’t seen wholesale changes to this point. Bond markets, driving mortgage rates, have been as volatile as ever, and what little confidence that exists is insufficient to allow us to breathe any easier.
The 2008 housing market was as poor as any in recent memory in Connecticut. The median sales price of single-family homes dropped more than nine per cent from 2007, while sales fell almost 25 per cent from the prior year. Further, the median sales price of $268,000 in 2008 was the lowest in four years.
Clearly, these dips were in large part due to the sale of distressed properties, such as foreclosed homes and short sales. Here’s a smattering of statistics locally: in Avon, the median sales price dipped almost 6%; in Bloomfield, slightly more than 10%; East Hartford, 8%; Enfield, 7%; Farmington, 10%; Glastonbury, 1%; Hartford, 8%; Manchester, 13%; Middletown, 7%; New Britain, 11%; Newington, 8%; Rocky Hill, 9%; South Windsor, 1%; Tolland, 6%; Vernon, 10%, West Hartford, 2%; Wethersfield, 4%; Windsor, 5%; and in the meantime, Simsbury “shot up†3%.
That’s too much news for most of us, I know. Here’s some good news: CHFA loans are currently at 5.00%. There is a plethora of first-time homebuyers merely waiting to take advantage of these wonderful deals. If prices are down, and some of our best rates are down, what’s holding back progress?
With apologies to the late Hunter S. Thompson: fear and loathing holds people back; job insecurity holds people back; damaged property holds people back; lack of funds holds people back; inefficiency holds people back. Allow me to touch on the latter element – we’ve seen enormous inefficiency in the mortgage industry. Due to what was initially seen as the “sub-prime†crisis, lenders began cutting back on all sorts of products, tightening up their standards so as to allow for “better quality†loans. It may be just one person’s view, but what was really tightened in far too many cases was common sense.
Please don’t accuse me of taking the mortgage industry to task all by itself. Willing co-conspirators in this disastrous meltdown were plenty of real estate agents, attorneys, so-called “credit counselors†and, of course all of the friends and acquaintances we call upon regularly to lead us to proper decisions in our financial lives.
I don’t like doom and gloom. Perhaps some might call it a Pollyanna-ish view, but I remain optimistic in general. There is so much pent-up demand at present that coincides with a strong desire in the halls of power in Washington and elsewhere, that we are bound for improvements in the marketplace.
Please keep the faith with me. There’s been some serious dropout in real estate-related businesses. I’m not going anywhere, though – I pray we’ll all stay focused and that 2009 will mark a turnaround that will lead to an even greater turnaround. The promise is still good.
We heard that interest rates would be reduced drastically in order to stimulate our economy. Although there has been a dip here and there, we haven’t seen wholesale changes to this point. Bond markets, driving mortgage rates, have been as volatile as ever, and what little confidence that exists is insufficient to allow us to breathe any easier.
The 2008 housing market was as poor as any in recent memory in Connecticut. The median sales price of single-family homes dropped more than nine per cent from 2007, while sales fell almost 25 per cent from the prior year. Further, the median sales price of $268,000 in 2008 was the lowest in four years.
Clearly, these dips were in large part due to the sale of distressed properties, such as foreclosed homes and short sales. Here’s a smattering of statistics locally: in Avon, the median sales price dipped almost 6%; in Bloomfield, slightly more than 10%; East Hartford, 8%; Enfield, 7%; Farmington, 10%; Glastonbury, 1%; Hartford, 8%; Manchester, 13%; Middletown, 7%; New Britain, 11%; Newington, 8%; Rocky Hill, 9%; South Windsor, 1%; Tolland, 6%; Vernon, 10%, West Hartford, 2%; Wethersfield, 4%; Windsor, 5%; and in the meantime, Simsbury “shot up†3%.
That’s too much news for most of us, I know. Here’s some good news: CHFA loans are currently at 5.00%. There is a plethora of first-time homebuyers merely waiting to take advantage of these wonderful deals. If prices are down, and some of our best rates are down, what’s holding back progress?
With apologies to the late Hunter S. Thompson: fear and loathing holds people back; job insecurity holds people back; damaged property holds people back; lack of funds holds people back; inefficiency holds people back. Allow me to touch on the latter element – we’ve seen enormous inefficiency in the mortgage industry. Due to what was initially seen as the “sub-prime†crisis, lenders began cutting back on all sorts of products, tightening up their standards so as to allow for “better quality†loans. It may be just one person’s view, but what was really tightened in far too many cases was common sense.
Please don’t accuse me of taking the mortgage industry to task all by itself. Willing co-conspirators in this disastrous meltdown were plenty of real estate agents, attorneys, so-called “credit counselors†and, of course all of the friends and acquaintances we call upon regularly to lead us to proper decisions in our financial lives.
I don’t like doom and gloom. Perhaps some might call it a Pollyanna-ish view, but I remain optimistic in general. There is so much pent-up demand at present that coincides with a strong desire in the halls of power in Washington and elsewhere, that we are bound for improvements in the marketplace.
Please keep the faith with me. There’s been some serious dropout in real estate-related businesses. I’m not going anywhere, though – I pray we’ll all stay focused and that 2009 will mark a turnaround that will lead to an even greater turnaround. The promise is still good.
Hi gmakerley,
Like most of the borrowers even I was expecting a drastic fall in the mortgage rates. But to my surprise the rates fluctuated mostly within 5.5%-6.5%. It's great to hear that CHFA loans are available at 5%. Not only the first time home buyers but also the people who are interested in refinancing can get benefit from this.
Being optimistic is really a good option than maintaining an atmosphere of doom and gloom. Like you I hope that we will definitely see something positive in the real estate market in 2009.
Thanks.
Like most of the borrowers even I was expecting a drastic fall in the mortgage rates. But to my surprise the rates fluctuated mostly within 5.5%-6.5%. It's great to hear that CHFA loans are available at 5%. Not only the first time home buyers but also the people who are interested in refinancing can get benefit from this.
Being optimistic is really a good option than maintaining an atmosphere of doom and gloom. Like you I hope that we will definitely see something positive in the real estate market in 2009.
Thanks.
well, niicss, refinancing is not a possibility with chfa loans - they are specifically tailored to first-time homebuyers only.
i've seen rates better in the last few days, though they jumped about .375 today from yesterday. this seems to be the trend - down .25 one day, up .25 the next, down, up, up, down, down...all resulting in not much change at all.
i've learned in the last few days that overall "showing" activity is up all across the country. by "showing" i mean people going out with real estate agents for the purpose of viewing homes for sale. the more homes that are shown to prospective buyers is a very good thing, as that will help us overall - sell more homes, make more loans, etc.
i agree that optimism is key. Chekhov said "man is what he believes," and there's an English proverb that states "he that seeks trouble always finds it."
i choose to see light at the end of the tunnel and to "dream lofty dreams."
i've seen rates better in the last few days, though they jumped about .375 today from yesterday. this seems to be the trend - down .25 one day, up .25 the next, down, up, up, down, down...all resulting in not much change at all.
i've learned in the last few days that overall "showing" activity is up all across the country. by "showing" i mean people going out with real estate agents for the purpose of viewing homes for sale. the more homes that are shown to prospective buyers is a very good thing, as that will help us overall - sell more homes, make more loans, etc.
i agree that optimism is key. Chekhov said "man is what he believes," and there's an English proverb that states "he that seeks trouble always finds it."
i choose to see light at the end of the tunnel and to "dream lofty dreams."
Yes George, there are rate cuts and sale prices have dropped down in most areas. But the frequent job loss is a matter of concern. I wonder what happens to those who lose their jobs and have obligations such as mortgage payments, credit card bills… ever since the mortgage meltdown, global recession and job cuts, people have lost their confidence…the rise in the number of people losing their homes is what must be holding back many from at least finding out if at all they have homeownership opportunities.
The only way out I believe is proper awareness of what is available in the market. I think home buying seminars can play a good role here. Also there are consumer education workshops being held by the housing finance authorities. Anyone buying a home for the first time can attend such sessions and get an idea of what home buying and mortgage are all about.
Regards,
Jessica
The only way out I believe is proper awareness of what is available in the market. I think home buying seminars can play a good role here. Also there are consumer education workshops being held by the housing finance authorities. Anyone buying a home for the first time can attend such sessions and get an idea of what home buying and mortgage are all about.
Regards,
Jessica
i definitely agree that counseling and seminars are valuable. in fact, we have held two sessions since the beginning of january to deal with foreclosures, short sales, how to deal with a delinquent loan situation, and on first-time home purchases.
regrettably, attendance has been far lower than we had anticipated. i am talking about FREE information - valuable information - yet we only had a handful of people in attendance. it wasn't a matter of not getting the word out, either.
and if anyone in this morning's audience is in connecticut, there is a free seminar/conference at the connecticut convention center today in hartford, beginning at 10 am (it's 8:45 here now), and running until (i think) 4 pm. this is an opportunity for troubled borrowers to sit down with lenders, etc. to get some more valuable information.
i only learned about this late, so i wont be there myself as i couldnt arrange my schedule - i wish i could, since there will assuredly be good information that i can use to pass along to my clientele.
so...anyone in connecticut who is close enough to get to hartford today...by all means, do so and attend this conference. i'm sure it will be worth your trouble.
regrettably, attendance has been far lower than we had anticipated. i am talking about FREE information - valuable information - yet we only had a handful of people in attendance. it wasn't a matter of not getting the word out, either.
and if anyone in this morning's audience is in connecticut, there is a free seminar/conference at the connecticut convention center today in hartford, beginning at 10 am (it's 8:45 here now), and running until (i think) 4 pm. this is an opportunity for troubled borrowers to sit down with lenders, etc. to get some more valuable information.
i only learned about this late, so i wont be there myself as i couldnt arrange my schedule - i wish i could, since there will assuredly be good information that i can use to pass along to my clientele.
so...anyone in connecticut who is close enough to get to hartford today...by all means, do so and attend this conference. i'm sure it will be worth your trouble.