Should we be discussing this in front of everyone? YES! Let’s deal with reality – we can handle the truth!
- Sellers who need to sell can adjust, if needed.
- Buyers looking for a better deal will stay engaged.
- New agents (since 2009) will build new skills.
Here are observations from a public FB real estate group. Let’s note the reports of solid business here too – houses are still selling:
Slowdown is definitely here, besides for price reductions…I am seeing rentals pop about 6-10% on monthly rates.
Jim can you explain the comment from the person in the post with a “point of view on the lending side”? I don’t understand what he is saying. Just curious.
Thanks,
BAM
Would you buy a house in this market? Assuming you didn’t have equity from a prior sale.
So, when I was a kid, a friend of mine got popped in the nose by another kid. He came to my house to complain about it, and my dad was listening in.
Me: Why’d he punch you in the nose?
Friend: For nothing! Nothing!!
Me: Must have been something…
Friend: I didn’t say anything! He just punched me in the nose!
Me: And his reason was?
Friend: He said he didn’t like me looking at him! That’s a reason to punch me?!
My Dad: Kid… if someone doesn’t like you, one reason is as good as another.
Conclusion: When you hit the resistance level of a well established chart, one reason is as good as another.
Jim can you explain the comment from the person in the post with a “point of view on the lending side”?
He said:
QM = qualified mortgage, meaning they fit the normal underwriting standards and could prove their income using tax returns – and the lender has made a good-faith effort to determine that you have the ability to repay your mortgage before you take it out.
He means that alternative documentation is back, and they are using 24 months of bank statements to qualify, instead of tax returns. It is an alternative that was made famous by First Franklin back in the day, and you can see here how it turned out for them. They did so well that Merrill Lynch bought them in 2006 for $1.3 billion:
https://en.wikipedia.org/wiki/First_Franklin_Financial_Corp.
Here is another comment left at FB since:
I can feel the sarcasm, but it is seriously Great News for us that we have the Non QM loans and the Renovation loans as well as the conventional loans as they are making our paychecks. Our clients are competing with cash buyers because of these loans, buying cheap and renovating just like buyers on HGTV. I just closed a bank statement loan – if they used their taxes they would qualify for a home for $350K – with a bank statement loan they qualified for 800K. Great for buyers that write off a lot on their taxes. I am building home buyers. I am doing these loans with top rated conventional lenders that also saw the shift coming and brought these products on. Good to be on the leading edge.