A Tentative Spring has come to Local Real Estate Market

Dear Sue,

My Realtor told me that the sales in her office are on the rise. She said that the phones are ringing and that people are out looking and escrows are starting to close.

I even read headlines in a local newspaper “The Bust is Ending Soon.”

Do you think that we are starting to recover? Do you think the worst is over?

Sign me Cautiously Optimistic

Dear Cautious,

I would describe the current state of the economy in the same way that I would describe this Spring’s weather. “Tentative.”

Recent 70-degree days have been dampened by hail and snow. A morning of frost is followed by yet another beautiful sunny day. Tentative.

Federal Reserve Chairman Ben Bernanke said that there’s been “tentative signs” that the recession may be easing. “Recently we have seen tentative signs that the sharp decline in economic activity may be slowing. A leveling out of economic activity is the first step toward recovery.” He explained.

Sanjay Varshney, dean of the college of business administration at California State University at Sacramento, believes that we are near the floor or a bottoming out of local real estate values by years end.

Local economists believe that our Bust will be ending soon while others say that we need to prepare for yet another wave of foreclosures that will further dampen real estate values.

The Federal Government has initiated many innovative programs intended to keep Americans in their homes and reduce the foreclosure rate. As Spring weather needs time to establish itself so do these programs need time to work.

The Fed has cut a key bank- lending rate to a record low of nearly zero. The Fed has also plowed $1.2 trillion into the economy in an attempt to reduce interest rates for mortgages and other loans.

A standard loan modification program for distressed homeowners has been put into place. The details of this program can be found on the FinancialStability.gov web site. The program is designed to allow homeowners to process their own loan modifications. It’s not necessary to mail off $2000-4000.00 to some loan modification company that you may never hear from again!

There’s even a refinance program available for those borrowers that have been current with their loan payments. It is streamlined with no documentation and no appraisal requirements. Investment properties qualify. I would suggest calling your favorite lender and have him/her do a mortgage review.

The U.S. Treasury Department has announced a joint public-private program to buy almost $1 trillion of the troubled mortgages and securities that have been at the root of the credit crunch. The U.S. Treasury has committed up to $100 billion with the rest coming from the private sector. The mortgages purchased under this program will be held by asset management firms until profits can be realized.

According to Bernanke, the Federal Government is working on other programs designed to assist Americans with consumer credit.

I think that time and cautious optimism is a matter of good Home $$’s and Sense.