by G. Sax
Avoidance. I am a master of the practice, and I have achieved the ultimate so far this week. As the snow is falling and winter's chill is shiver-me-timbering from Portland, Oregon to Portland, Maine, I am relaxing in Ridgecrest, California. Snowless, grassy Ridgecrest, California.
Normally, this middle-of-nowhere town is the last place one would think to go for a holiday vacation—especially with Las Vegas, Hollywood, and San Diego within striking distance. But it's been a suitable winterlude for rejuvenating my spirit, constitution, and fortitude for the next ten weeks of freeze.
I love me some St. Paul, but if the weather outside is frightful, I say take advantage of the international airport just over the Mississippi River. I was lucky enough to get out of town with just a two-hour delay. I heard that folks at Sea-Tac Airport have been hanging around the terminals for at least three days! I like to think that employees at MSP International Airport are extra prepared for the elements. They proved it this week.
Unfortunately, it doesn't matter where I go to avoid winter, the wintry news about the economy and housing continues to follow. According to a Reuters story from this morning, the nationwide median home price has fallen 13.2 percent over the last year.
Said Lawrence Yun, Chief Economist of the National Association of REALTORS®, "The quickly deteriorating conditions in the job market, stock market and consumer confidence in October and November have knocked down home sales to another level. It is, therefore, imperative to provide incentives for homebuyers to get back into the market."
Incentives. Is there an incentive to keep my property taxes from going up while my home value goes down? It seems the industry's mantra has shifted from "your home is a highlight commodity representing the American Dream" to "feel lucky that you even have a home, punk."
As cynical as I often come across, I am thankful for my home and I do believe in the American Dream. I just want a more realistic portrayal of it. I don't need an annual increase in financial value every year, because my home is already valuable to me. But freedom of choice is what keeps us rolling. And if I'm being taxed at rates astronomically higher than my home's value, something is amiss. My local government is eating its own tail, because as I give more of myself to keep the city's budget aligned, I spend less to bolster the local economy at the car wash, the Thai restaurant, the Supercuts.
Are new buyers the saviors? Good luck with that. I don't know too many new buyers that have 800-plus credit scores AND have 20 percent to put down on a turnkey Craftsman. Cheap foreclosures are a new option, but those have obviously kicked existing homeowners to an apartment down the street.
The lines are blurry. You can't just blame bad loans, greedy lenders, and over-reaching buyers. Good, hard-working people are losing their jobs. Growing families can't move up because they're upside down on what they probably worked hard to get. Foreclosures are selling through the market, but are they going to young, first-timers or deep-pocketed investors ready to make an easy resell when the market perks back up?
I don't have the answers this time, gentle readers. Neither do you, and that's okay. I do hope we can all ignore the headlines for a couple of days as we gather 'round with family and friends and enjoy that which is of real value: Presents. Lots and lots of presents.
Merry economy everyone!
Editors note: Homebuyers do not need credit scores of 800 or 20% down to buy a home. They do need credit scores in the 700's and will need a down payment of 3 to 5% in most cases. Talk to your lender. Home loans are available.
Greg there are programs where the buyer doesn’t need to put 20% down. The credit scores need to be around 720.
Last time I checked T, credit scores in the 600’s were still workable for FHA and programs like MHFA Bond Program. Given how many changes have occurred in the mortgage business so far this year it’s hard to keep up.
Oh, REALTORS. I know there are good programs out there for first-timers and that there are now compelling rates available for qualifying homeowners to refinance. I feel like part of my duty here is to set ’em up so you can knock ’em down.
And for those REALTORS who can’t punch holes in my hype, they should start bulking up their armory with this: http://www.realtor.org/government_affairs/fha_toolkit.
Perception is what it is, and I’m reinforcing it in a forum that is easily controlled by our favorite real estate diva. For you non-Teresa and non-Aaron Dickinson types looking in on this blog, I am writing not as a representative of the real estate industry but as a (maybe not so) average citizen of the city of St. Paul. I am attempting to capture the voice of St. Paul’s disenfranchised buyer, worried seller, neighborhood pub patron, local antique store shopper, public library user, civic booster, Summit Avenue Christmas light gawker. All while still trying to maintain that which is me while guest-spotting on a blog that is distinctly not me.
I will attempt to make offhand or amusing (or irresponsible?) statements for your entertainment, because I know Teresa’s got my back. At least until she kicks me off.
Which would be an entertaining outcome in and of itself. Be well, all. Homeownership is still killer…and very possible.
Good point Aaron.
Greg – even in humor we don’t want people thinking they can’t buy a home if they want to buy one and they can. It doesn’t help them, or help you as a home owner or me as a realtor.