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| Home Buddies Economic Outlook 3 - Credit and Investor Opportunity |
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| Written by Cliff Pape |
| Monday, 02 February 2009 09:48 |
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We studied the macroeconomic factors effecting the US in first two parts of the Quarterly Economic Report. This week, we will look into the future and give an outlook on the real estate and mortgage markets of 2009. Last, we are going to propose some opportunities that every investor should recognize in this stage of the surprisingly predictable real estate cycle. Credit Markets & Lending Perhaps the greatest news leading into 2009 is the commitment by the Department of the Treasury and the Federal Reserve ("The Fed") to achieve lower mortgage interest rates. The fed announced on November 25th that it would purchase $600 billion in Fannie Mae and Freddie Mac mortgage-backed securities and unsecured debt. Whether the government will be able to accomplish it or not, the idea is to lower the cost and improve the investment of financing a property. The goal is to decrease debt costs to put potential investors or retail buyers with good credit back in the market to stabilize the economy. If investors and retail buyers come back into the market, property values will begin to stabilize thereby improving the balance sheets in the banking industry. This has always been the role of investors in the real estate cycle. This is also a plus for the mortgage loan officers and brokers because the credit markets will ultimately loosen and in 2009 the mortgage market should swing back up. The cycle to this point has been fairly predictable and we have long been predicting the next refinance boom following government intervention. The Real Estate Markets There are a few things to keep an eye on in Houston. If housing permits continue to contract, it could be a while before the national residential real estate scene improves. Several markets such as Houston are still bucking the national trend, but, even in these markets, permits are beginning to contract which is pointing toward a slow-down as we head into 2009. Layoffs will be the biggest indicator for Houston for next year. If there are massive job losses then the already fragile market could see a big setback. Opportunities for Investors With all the "fear" that is surrounding the mortgage and real estate markets, there has never been a better time to buy single family residential homes. Consumer concern over the financial crisis is causing real estate prices in stable markets, such as Houston, to fall under what the market fundamentals in Houston would otherwise warrant. In addition, with lending standards still remaining tight, many buyers are unable to credit-qualify to purchase a single family home. This is creating, and will continue to create, a great opportunity for savvy investors to pick up investment properties at undervalued prices. About the Author: Home Buddies is a Houston credit repair coach for real estate investors. Home Buddies coaches clients through the process of restoring credit and creates a business development strategy to help them overcome obstacles to financing properties and growing their portfolio. Kindly provided by LJ-Marketing.dk You are welcome to use this article on your own website, if you include the link just before this text. |
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