The Hole in the Bottom of the Boat
December 17, 2008
Post Tags: housing industry , Tucson Real Estate
Yesterday’s post Free Lunch Loans and The Economy of Greed ended on a rather gruesome mental picture of the body expelling waste. Didn’t mean to leave it there and didn’t realize the impact of that mental image till I was rereading it in preparation for this post continuing the last point on the hole in the bottom of the boat. My apologies for anyone with a cold.
The Economy has a Cold
An Economic Cold
This might be the best way to describe it. The cold came from over exposure due to the hole in the bottom of the boat. The housing industry is where the cold was caught as outlined yesterday. Now the hole is being sealed up, but it isn’t government that is doing the work.
The hole in the bottom of the boat is being sealed slowly by natural healing process. There are a lot of homes on the market from short sales and foreclosures. Mixed in there are people that need to buy or sell a home due to their life circumstances. The qualified buyers are the ones that are in the best position. They have the money to put down on a home, they have the best interest rates seen in decades and the lowest asking prices in 5 years.
Sellers, it isn’t all bad news here either.
Yes, if your home is in short sale or foreclosure it is a difficult time. If there are a lot of homes in the market in your neighborhood which are in this situation it does make it more difficult for you as a seller.
When the Night is the darkest the Stars shine brighter
Have you ever heard this saying before. It applies to the Tucson Real Estate market today. Price your home for the market, and make it look like a model. It is competing against a lot of homes that have been left fall into disrepair. Many people that are in short sale or foreclosure simply do not have the funds to keep the property maintained.
Make your home standout among all the other homes on the market will make a significant difference. There are buyers in the market and there will be more in the coming months. If you are thinking about putting your home on the market then start getting it ready now.
What is happening now in Tucson and just about every other city in the nation is the cutting back on spending and tightening of belts financially. It is also a time to learn how to save and escape the economy of greed and consumerism.
It is going to take time for the hole in the bottom of the boat to be closed up. It consists of foreclosed and short sale properties. Home values are dropping because of this hole. But these are not the only contributors to the hole in the boat. The economy of greed was fueled by speculators and sellers themselves seeking a fast buck and easy money.
The hole in the bottom of the boat was also created by buyers who were willing to purchase homes with no money down and no way to pay for the mortgage. The assumption was “We will get an interest only loan, make the minimum payments and when the loan changes we will have sold the home for a profit before we have to start paying interest.“ This entire shell game was based on a false assumption that home values would always continue to rise.
There never was any evidence to support this assumption and the economy of greed was built on the premise of “Don’t be caught standing when the music stops because there aren’t any good chair in which to sit.”
The low interest rates for mortgages is helping heal the hole. First time home buyers which have saved for their down payment and closing costs are healing the hole in the boat. The financial industry tightening lending practices are also contributing to healing the hole in the boat. It is to everyone’s and every institutions benefit to heal the hole in the bottom of the boat.
The leak started in housing, it will be the first closed to make an economic recovery possible and sustainable.
