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Right Along With the Grunge Look, the Housing Crisis is Over

Eric Trailer, Mortgage Banker, Absolute Mortgage Banking

May 28th, 2008 · 8 Comments

Yes, for those of you gents who still may be holding on to the rather relaxed “grunge” look from the 1990’s, I’ve got a newsflash for you: grunge, along with the current housing crisis, is over.  

Articles about the housing crisis ending have been few and buried in their respective periodical, my favorite of which was in TIME magazine back in February titled, “Ignore the Headlines“.  But now we have the Wall Street Journal. claiming that the trough was reached in April with an article from May 6, “The Housing Crisis is Over“.

I agreed with Peter Lynch back in February.., and it’s becoming more an more apparent that the longer prospective home-buyers sit on the fence, the more expensive that home purchase will become.  And this is not just because I believe that home prices will rise, it’s also because I believe that both long and short term interest rates will rise.  The 10-year Treasury Note, for example, is up over 1/2% since the middle of March, and the 10-year Treasury Note is a decent barometer to use when you want to know what the trend in long term mortgage rates have been.

That written, if you really want to continue with the grunge look, might I suggest saving it for your next camping trip?

As always, kindly consult with your trusted real estate, tax and mortgage professional before seriously considering any home purchase.

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8 responses so far ↓

  • 1 BawldGuy Talking // May 28, 2008 at 12:01 pm

    Eric — Since my firm does business in many states, we get to see several different ‘big pictures’ out there. What we’re seeing in the areas we recommend is solid fundamentals, and lenders lending.

    Though most of the so-called evidence of imminent recovery is anecdotal, it’s becoming more and more convincing as time passes.

    The behavior of both home buyers and investors are changing as we watch in real time. Ignoring these changes is foolish.

    When REO’s in Phoenix are getting more than listed price, often with multiple offers, it’s time to pay more attention.

  • 2 Athol Kay // May 28, 2008 at 6:22 pm

    Don’t get too excited by Time Magazine. Here’s last issues cover story…

    How the Next President Should Fix the Economy
    “Your paycheck is shrinking, gas costs $4 a gallon, and your house is losing value. Here’s how to tackle the big issues.”

    Personally I think it’s going to be generally a long rough ride with gas at $4+ a gallon and the sub-prime mortgage et al still has a ways to play out yet. The Federal budget has been off by $500 Billion annually on average since Bush took office so you’d think that credit card would max out eventually.

    It’s all location location location though… warmer climate areas should on average do better than anywhere that uses oil to heat homes.

    In the end, there is no big picture to worry about though. Just the soundness of an individual deal.

  • 3 real estate // May 30, 2008 at 10:00 pm

    I have found a real estate portal site. It will help u lot. In this site they given all the details of houses for rent, sale, and lease . This site have their national wide locations. U will get the financial details. U can add your business there .this site will also give information on legal laws in real estate business.

    The site will give on information on store/packing

    You can check it out at http://www.aaamoving-store.com/

  • 4 TahoeHomeTalk » Blog Archive » Call me when the market hits bottom… // May 31, 2008 at 6:33 am

    [...] to an article by Eric Trailer on the 3OceansRealestateblog, who wrote “Right Along With the Grunge Look, the Housing Crisis is Over“  it said in [...]

  • 5 Mr Skeptic // Jun 2, 2008 at 11:41 am

    Did you actually read the WSJ article to which you refer?
    “…house prices won’t stop falling entirely until
    inventories reach five months of supply
    sometime in 2009.”

  • 6 Eric Trailer, Mortgage Banker, Absolute Mortgage Banking // Jun 2, 2008 at 3:06 pm

    Hello Mr. Skeptic,
    At last check the article was longer than one paragraph, but let’s elaborate on your inquiry. The key word used by the WSJ in that paragraph you reference is “entirely”. Reading the entire article helps one to conclude that we have hit bottom on a very large scale. This means that prices on the majority will be rising with the minority falling. By 2009..,prices accross the board should be up. In the meantime, buying in places of high demand, like the Bay Area of CA, will likely be less expensive now than later.

  • 7 Mr. Skeptic II // Jun 25, 2008 at 10:26 am

    Suddenly there IS a national real estate market?

    I am sure that in some areas, where prices have already returned to historical relationships to income, the drop has is near bottom. This may even apply to outlying parts of the Bay Area. This does not apply to western SC County, Berkeley, central SF, Marin, and so forth, where the option ARMs don’t start resetting until later this year and where prices haven’t dropped much if at all.

  • 8 Danilo Bogdanovic // Jul 2, 2008 at 8:10 am

    The media is behind the times - always has been and always will be.

    I’ve had buyers argue with me regarding market conditions in my area (Northern VA/DC metro). They say that everything they read says the prices will tumble way further so they’re “holding out until later this year or next year”.

    Meanwhile, they’ve seen their options depleted (inventory is way down) and the prices remain the same if not increase slightly in some areas. In addition, interest rates are up almost a point from 90 days ago so now they can’t afford to buy the type of house they originally wanted to.

    Sure those buyers would love to say “Thanks” to mass -media for the stellar articles and advice…

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