Hello, and welcome to Real Estate Reality Radio. The most important hour of radio every Friday from 9 to 10 on WBCB 1490 am. Thank you for joining us. For those of you who are new to the show I have spent the last 40 years in the real estate industry both as a realtor and a mortgage banker. The show is dedicated to dispelling the myths associated with Real Estate and finance in your marketplace.
Within every market there are obstacles and solutions on the path to tremendous opportunities. I believe that most people are looking for practical advice. Please feel free to call 215-740-8999 or visit peterbuchsbaum.com.
Please join us live on the web at www.wbcb1490.com or on your FREE app Tune In Radio from 9:00am to 10:00 am every Friday.
So last week we were in an open forum discussing many misconceptions.
This week the Real Estate News was all about the surge in prices slowing? Yes the increase from last month was 12.1%. That number however was the first month in over a year that did not surpass the prior month. Home prices are now at 2004 levels (23% below their 2006 peak. Many like me believe the slip in month over month gains is due to the interest rates rising too fast. I believe rates were too low to be sustainable but the sudden increase was too much too fast. Questions about the future of Fannie and Freddie. Henry Paulson was the Treasury Secretary at the beginning of the financial crises deemed the “Great Recession”. He has thrown in his thoughts recently about Fannie and Freddie. He believes that the reason it is so difficult to reform the two mortgage giants is because those with a vested interest carry a lot of weight politically and they perceive any change a challenge to their interests. He believes that their mission should be limited to first time homebuyers. He feels that if nothing is done we are at risk of creating a similar problem to what we just went through. Finally how the Federal Reserve can end the stimulus and not kill housing. Lately the biggest news in the stock and bond market (drivers of interest rates) has been not if but when the Federal reserve will stop buying bonds and mortgage backed securities. This speculation is the sole cause of the aforementioned dramatic rise in rates. Two economists from Northwestern University offered an idea at a conference recently. The idea was to stop buying treasuries and start selling old notes. Continue to buy mortgage backed securities while selling older securities. The thought is that this will not push rates higher. Time will tell.
Today Eddie and I are on our own to discuss the new normal in your marketplace.
Please join us live at www.wbcb1490.com for the open discussion about what’s next in your marketplace.
In combination with CBS and WPHT 1210 am we have also been fortunate enough to have been asked to write some articles in “Local Living Magazine” to explore some of the questions you all ask us and the answers we provide. Look for your latest issue this month. For a FREE subscription please email us.
Each week we discuss the myths of the mortgage market. It is not about rate. A higher rate with no mortgage insurance may provide a lower payment.