The President of NAR, National Association of Realtors recently sat down with Citibank to discuss the possible loosening of qualification standards for borrowers. The meeting went well.
Anytime I am asked what I do for a living and I reply that I am a real estate broker, invariably, people ask, “how’s the market?” In recent years, the answer to that question has been difficult to hear. Lately, however, I am able to say that the market is making great strides in the right direction toward recovery. I have been able to say that there has been no better time to buy. The interest rates are at all time lows and the prices of homes have corrected, if not over-corrected, and are quite low. It is like a perfect storm for buyers these days! What’s funny about this conversation is that once I say this, the person follows it up with, “yeah, but no one can get any loans to buy anything with…” For the most part they are right. Hard to argue that when the banking world tightened up, it really tightened up. Lenders truly are under the gun to only loan to the super well-qualified buyers these days. For a long time, it was the exact opposite. Lending standards were set incredibly low. Congress wanted everyone to be able to buy a home and made it easy for lenders to come up with “creative” lending practices. Hell, my dog could have qualified for a condo in Denver three years ago! And, because it was so easy for people to buy homes, demand shot up and so did values. But we all learned that homeownership is not for everyone. My dog would have been a horrible homeowner! The point is, something had to give. Banks had to tighten up. Prices had to drop. We’ve lived through that market adjustment and people need to be reminded that homeownership can be the best investment a person can ever make. It does have to be done right, however.
So, back to the little sit-down that the NAR President had with Citi and other Big-Wigs in the banking world. What is important about it is that the dialogue has begun with the right folks in order to right the ship. It is a slow process to turn a ship around in a rough sea. Think of the housing market as a giant cruiseliner in a hurricane, try figuring out how to turn that baby around! Seriously, though, last quarter has shown that the seas have calmed and the captains are steering again. The market has corrected and now the bankers will make the proactive steps in the right direction to get the ball rolling again. Bankers need to do actual banking if they want to make any profit. So, believe me, they want to get the money out there, hang in there, the seas have calmed and we have spotted land!
Want to know more? Contact me, Jeff Hansen