LOCAL AND GLOBAL

That tired old expression says that all real estate is local and it's true enough, but we have reached a point where it is equally true that all economics are global. Much as it is suggested allegorically that the beating of the wings of a butterfly in the Amazon gives rise to the flutter of the leaves in the trees in our backyard, any small financial movement anywhere in the world can have an impact on the economy of geographically distant markets. The financial markets are making adjustments in the billions, largely the result of some very bad sub-prime decisions, but not exclusively so. Gamble fever created some very reckless behavior in other market segments as well, highly leveraged buy-outs and unrealistic valuations of business entities, etc. Whether or not it was global credit problems at fault, the fact of the local real estate activity is that for February, even with an extra day, sales of single family residences were just over50% of February 2007. We're coming into traditional season for an upsurge in activity. Be interesting to see what develops. Foreclosures continue to make the news, from Bernanke on down. Lots of viewing with alarm but solutions seem in short supply, and in this election year those solutions that are bandied about, almost uniformly call for the use of our money to bail out those who made bad decisions. It's probably a selfish view, but I think if you speculate and win, good for you and enjoy the proceeds, but if you lose, suffer in silence. A house is a home, not an investment vehicle.
Enough of that. We are now approved to originate loans for teachers, and government employees, (California), plus have taken on some new programs to assist first time home buyers and others with down payment money in short supply to get into a new home. These latter programs are NOT for poor credit or limited income applicants. We also have come upon a major investor through whom we can provide mortgage financing for those with damaged credit. Again, this is not a return to the nutty sub-prime days, simply someone who will take a measured look at applicants on a case by case basis.
Our perspective on the market in our local area, we expect home prices to continue adjusting downward, modestly in the Chico area, more significantly in the Orland and Oroville area. There is a large pool of homes on the market and an increasing number of foreclosed properties available also. Interest rates are moderately volatile, but at a low level, ranging in the low 6's for the most part. Some lower rates are available for some of the specialty products mentioned above. We still see people listing their homes with real estate agents charging 6% and it is baffling. Why anyone would pay $18,000 or more of their money to sell a home when the same service is available for so much less is beyond understanding. Spending wisely is adult behavior, and saving money simply makes good sense.
As usual,
Thanks for visiting/