Home Sales Are Up! So...Does That Mean The Recession Is Over?

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Mortgage and Lending with First Time Home Buyers, Pre-approvals, Fixed Rates 172223

Well, it's probably optimistic to start saying the worst is over in this recession...or is it? Traditionally with recessions, one of the primary indicators that we are coming out of it is that goods for sale(in this case housing, since that is one of the primary reasons for the recession in the first place)reach a floor in prices and start selling again.

Basically, that's what's happening. Home prices have dipped to levels unseen for quite some time. As a homeowner, its bad news to know the average sales price in the United States in DOWN 15%. But from a home BUYER point of view...it's a great time to buy a home for considerably less then two years ago. So again...does that mean the recession is receding?

One of the other significant indicators in Unemployment Rates. Unfortunately unemployment usually doesnt decrease until the END of a recession, so its a bit early to say. We didnt have any major layoffs last week...that's the first in awhile. But unemployment rates are still high and will continue to be until businesses start hiring again...a major sign that the worst is over.

But one of the joys of blogging is...I get to give MY opinion. And, if you ask me...I think we still have a ways to go. The last few Sub-Prime borrowers that took out 2year adjustable rate mortgages will have their first adjustment this year, that has been a major reason for the foreclosure rates. Those initial adjustments are significant and can cause mortgage payments to increase HUNDREDS of dollars. Also, there were some(less, but some)3year ARM's and those will be coming up on their adjustment period as well. So, expect another year of foreclosures BUT if people are buying anyway, the impact wont be as much as the last two years.

Banks continue to be tight with their money BUT they are lending to qualified buyers, and with the tax incentives and low prices, this is an incredible opportunity for people to get into a house!

 

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  1. Kenny Hayslett 03/26/2009 09:40 AM
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Rainer
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Kenny Hayslett
Re/Max Realtec Group - Clearwater, FL

Hey Chad-great post.  Thanks for updates on ARM's soon rearing their ugly heads, resurfacing a potentially new cycle of foreclosures.  It is a great time to buy.  All we can do is educate our prospects and sell based on what's right in front of us.  Thanks again for updates---

Mar 26, 2009 09:36 AM #1
Rainmaker
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John Mulkey
TheHousingGuru.com - Waleska, GA
Housing Guru

I see a lot of excitement over February's increase in new home sales, but it's little comfort when you realize that February sales were still the worst for that month in history.  We'll have to see a steady increase in employment before we can begin to climb out of this housing crisis.  It's still far from over.

Mar 26, 2009 10:11 AM #2
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Chad McDowell

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