Mardi Boettcher's Blog

In this market, where homeowners have to compete with the “fire sale” prices of bank owned homes, it more important than ever for homeowners to be realistic about their home’s values.  It often is difficult for homeowners to objectively value their homes, which often reflects their sense of personal style.  However, by consulting with a REALTOR®, using online resources, investigating neighborhood trends, and soliciting the opinion of friends, homeowners can arrive at a reasonably accurate appraisal.  If they cannot accept the reality of the situation, I recommend that they wait for a more favorable selling climate.  On the positive side, they will often more than make up the loss from the savings on their new purchase.  It is important to have their agent help them “crunch the numbers” before making the final decision.

If they are having financial difficulties, it is critically important for them to consult with their real estate consultant to get accurate information on all their options and the possible consequences.

Senate Banking Committee chairman Chris Dodd, D-Conn., went on the record Tuesday calling for a seven-month extension of the $8,000 first-time homebuyer tax credit, which is set to expire in five weeks.  Sen. Dodd said home prices are stabilizing but “we still need to use every tool at our disposal to try and fix this problem.” The White House has yet to reveal its position on the extension. The National Association of Realtors and other trade groups are supporting the extension.  Jay Brinkmann, the chief economist for the Mortgage Brokers Association told the committee that one great unknown facing the market is the affect on interest rates when the Federal Reserve stops purchasing mortgage-backed securities from Fannie Mae and Freddie Mac.  He noted that there is growing concern over the issue saying, “While the most benign estimates are for increases in the range of 20 to 30 basis points, some estimates of the potential increase in rates are several times those amounts.”

Pay close attention to this last bit.  At our office meeting last week, Dick Selzer said that he thinks interest rates will go up rapidly.

I’ll keep you posted.