Current Home Buyers Beware!

I have been in Lending and Real Estate for about 12 years professionally. Before that I was always with my Grandfather watching and learning this business from him. He was in this business for over 50 years. What is happening today is unprecedented.

Nothing like this has happened in over 100 years and nothing like this may occur again. At this point all I can say is “Buyer Beware” and “Current Homeowner Beware.”

Fannie Mae and Freddie Mac, the two GSE’s that purchase all of the conventional mortgages in the United States, last week reported losses in the 2nd quarter which was 3 times less then what Wall Street estimated. After they reported there earnings they announced that home prices are expected to fall on average an additional 20% from their current levels. Some areas will not lose as much while other areas will be impacted a great deal. The hardest hit areas will be California, Nevada, Florida, and Arizona.

What does this mean to buyers?

What you buy today will be worth less in the next 12 months. Once home do start appreciating they will appreciate at a much slower pace then at anytime in our history.

What does this mean to current home owners?

As long as you have no plans to move for several years then you are fine. For those who cannot afford the house payment anymore you might as well just walk away because I do not see any relief in sight. Even though the government approved that Housing rescue bill we still do not know all the details. It is estimated that it will only help 400,000 families but it is estimated that a total of 2 million families will be hit with Foreclosures in 2008.

What can we do?

I do not have the answers. However you may be able to find the answers by speaking to a professional in your area that handles these types of issues. You may have to confer with an attorney, tax, or real estate professional to help you with a plan. And believe me a plan is what every person needs right now. Do not go into this blindly. Get as much information as you can and be ready for the biggest roller coaster ride ever.

To find a qualified person to talk to in your area just go to 104inc.com. This site allows me to search different firms by geo-targeting the area that I live in. Check out 104cpa.com, 104realestate.com or 104attorneys.com as a starting point. You can see reviews posted by other users and join a network of like people who may be in the same.