Thoughts about where the Money Market is Heading?
Seems like day after day we are feed new information regarding foreclosures, lending standards and the credit crunch. It is hard to draw the line at reality and media hipe, but I think the truth can be found somewhere in the middle.
The releases from the major banks indicating a lack of public money is very disturbing. Because without money being lent to home buyers, homes will not sell. Fortunately, the government is stepping up and issuing more government backed loans through the FHA. This will help credit worthly home purchasers.
We do have to remain patient to see the glut of home inventory decrease. Remember that hundreds of thousands of people bought brand new homes between 2002 through 2006. They are not ready to move up yet. Families, on average, stay in a home for about 7 years. So, we should see up-movers start repurchasing in 2009. What would be benefittal for the market in general would be to see investors come back. From personal experience, I know a lot are sitting on the sidelines to wait and see. Well, we are nearing a bottom and those that stay on the fence are going to miss a great opportunity. The way I see it, real estate is still a great investment. Everyday, 6,000 people are retiring. These retirees are looking for a great place to relax and enjoy the rest of their non-working lives. Tucson is a great place for many of them.
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