THE GANT RANT

by Karen Gant

The State of Real Estate

Where Do We Go From Here?

Hope is the thing with feathers
That perches in the soul,
And sings the tune without the words,
And never stops at all… Emily Dickinson

It has been 1170 days, 19 hours and 34 minutes since the Real Estate World lost its footing and began its slow and fiery descent into the bowels of the earth.  But who’s counting?

While the soothsayers and prognosticators predict a turn around the end of the year, the American public braces itself for ten or more months of declining prices and empty homes.  You may think this is bad news, but arguably, it is the best news we have heard in a long time.  It is finally, agonizingly, inching towards an end.  As it reaches bottom, it will inevitably change direction and head back up.

It’s no secret that only some will ride out the devastation of this economic debacle.  Those who do not have a strong financial foundation will experience short sale, foreclosure and eventually, irrevocable loss.  However, where there is loss, there is recovery and where there is optimism, there is hope.

Real Estate has been in the eye of the storm and struck with lightning force.  In Palm Beach County we have experienced a loss of equity in our homes of approximately 30%, particularly in new home communities and about 20% in older, more established communities.  Statistically, Real Estate prices have dropped 21% in the past few years nationwide.

There are many programs today that will help homeowners that are “underwater” to resuscitate their finances with lower interest rates on their existing mortgages.  The Home Affordable Refinance Program will enable qualified homeowners to refinance to lower mortgage rates or change adjustable rate mortgages to lower interest fixed rate loans.  This will help many people who have had difficulty making their payments or who are already behind.  These benefits will preclude investor owned or vacant properties.

For those who are buying, there will probably never be a better time again.  Low interest rates and declining property values have created a fertile market for aggressive buyers and investors.  This is a great opportunity to buy the home you’ve always dreamed about but could not previously afford.

Realtors say they are busy with buyers, banks appear to be more open to negotiating settlements and the consumer has modified his spending habits to reflect the stringent economy.  With this new paradigm, we will move into the next year with a more controlled and realistic approach to spending and investment.  More homebuyers will be acquiring a residence for the purpose of living in it.

Mortgage brokers and lenders will be servicing and approving loans for buyers who meet a higher standard of qualification, with irrefutable proof of income and purchasing ability. 

Gone are the angst ridden days of no docs loans, 100% financing and worthless mortgages.  A new order of sobriety has overcome the Real Estate market and it may be the best thing that has happened in a half century.  Even now, the American dream of home ownership is still very much alive.

In our peaceful and quiet community of Wellington and the surrounding area, we reflect the changes that will open doors for some and close them to others.  And we wait for the big comeback .

Karen Gant is a Realtor residing in Wellington with husband Richard and superdog, Gatsby the Great. They live in harmony in one of Wellington’s beautiful communities and like many homeowners today, wait for better times ahead.  Ms. Gant can be reached at: aroundwellington@earthlink.net.