Mar
27

The Real Estate Market Can Rebound Overnight!

Filed Under Real Estate Investing 

House For SaleContrary to what all the so called experts say the real estate market s could rebound “overnight”. Conventional wisdom and history show that markets and cycles change slowly. The best conventional wisdom analogy is that of turning around a huge ship…. It doesn’t turn on a dime, it takes time!

So why is Gerald Romine saying the market could turn around overnight? Because we do not have a housing crash, we have a credit fiasco where the lenders have tightened their belt making it very difficult to borrow money. There are buyers a plenty for the market and housing IF the lenders want to loosen the lending guidelines.

Put in plain English… if it was easy to qualify and get loans there would be a rush of buyers getting property. The reason I say the market could turn on a dime is because lenders could change the lending guidelines overnight if they wanted to.

Supporting Articles:


What’s happened is the Federal Reserve has lowered interest rates but the banks are not lowering the lending rates, are receiving more loan applications, and banks are approving fewer and fewer applications.

Facts You Should Know·

  • The difference between the 10-year government bond yield and the average U.S. fixed mortgage rate was 2.7 percentage points last month, the widest spread since1986.
  • ·The median price of single-family homes dropped 8.7 percent since February 2007, the most in four decades of record keeping.
  • The national vacancy rate increased to 2.8 percent in the fourth quarter, matching 2007’s first-quarter rate that was the highest in records going back to 1956, the U.S. Census Bureau reported Jan. 29.

While nobody has a crystal ball we should look at the facts and see the problems in the market today revolve around the ability to borrow
money. Lending institutions could change their lending criteria overnight and flood the market with ready willing and able buyers. But it is likely they will take small steady steps and control the wave of applications.

Don’t tell me it can’t be done or won’t happen because for the week ending March 21 mortgage application volume rose 48.1% compared to the previous week because the publish perceived the Federal Reserve’s rate cut would transfer to lower rates from the borrowers. It didn’t. But imagine what would happen if the lenders dropped the lending rates 1% and made it easy to borrow money. The rush would be on!

Author: Gerald Romine

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