Economists see deeper housing woes in 2009

Asked by ., Los Angeles, CA Wed Jan 28, 2009

Can it really be avoided and if so how?

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Christine Do…, Agent, Costa Mesa, CA
Wed Jan 28, 2009
I don't know if it can be avoided, but it seems people are more willing to buy as they see prices as more reasonable. In Costa Mesa, the number of sales in December 2008 were almost two and a half times more than in December 2007.

I have a thought on how the market can be helped which would have to be fleshed out by economists. What if the government were to subsidize some number of buyers at 1% interest on a 30 years fully amortized mortgage? Would those who are thinking decide now was the time to move before the number of subsidized loans were gone?
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Jeremy Lehman, Agent, Garden Grove, CA
Wed Jan 28, 2009
It depends on what deeper housing woes means. More foreclosures and shortsales?....most likely, but looking at the cities of Anaheim, Garden Grove, Fountain Valley, and Huntington Beach, 40% of the inventory is in escrow right now. What this tells me is that finally prices are at a level that buyers are willing to purchase and they are obviously not too afraid that prices will fall even further. Theres no doubt that our economy is in jeapordy, but I think given the recent market activity, great things are to be expected in the real estate industry in 2009. Interest rates are low, there are plenty of people qualified to buy homes, the affordability index is now above 50% (according to CAR), prices have fallen 30-60% depending on the area, and inventory has been steadily shrinking.

I don't think there is much we can do to prevent the foreclosures and shortsales happening in our market. The sad truth is that there are plenty of homeowners that cannot qualify for a loan modification, and in my experience, are not interested in trying to keep their property. Also, it is quite apparent now how many people were fraudulently qualified for a home loan.

The best fix for our "housing woes" is for everyone to purchase a property. If you are a buyer sitting on the fence, there may not be a better time to purchase real estate than 2009.

Jeremy Lehman
Century 21 Beachside
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