I just got off line with one of my fave mortgage gurus, Ron Schulz, over at Reliance, asking him what effects this new liquidity deal might have on our local real estate market. I love what he said:
“It means they are trying to assure the world that there is money in the system. If China and the US are working together it is serious. Europe is a mess !”
One of the culprits in the current crunch has been the Fed’s getting tough on banks and tightening lending by imposing increased reserves. Ron says they are lowering reserve requirements. I am refinancing a property now that is with Wells Fargo. They clearly do not want me as a customer as the loan is due Jan. 1 and I hear from them about every day that I had better get my butt moving. All that government bail out cash must have gone straight to the marketing departments! Personally, I want to stay with a local bank where I can meet my loan officer and shake his hand. That, says Inwood Bank’s Robert Poe, is the future of mortgage banking. Inwood Bank has just opened a fabulous new mortgage division. I asked Robert if the liquidity injection has had any effects on mortgage rates and he said no, not thus far. The stock market likes the move, and when the market goes up, rates usually go up, but so far, no changes.
Texas, as Ron reminded me, remains a country unto itself, thank God. I’m just now getting to yesterday’s Case Shiller and at first glance, looks like Dallas did OK. On a seasonally adjusted basis — September is a slower month for sales generally — five cities actually posted minute price increases. Those would be Dallas, Cleveland, New York, Portland, and Washington D.C. Eighteen of the 20 cities posted annual declines, and when you look at the whole national picture, it is still not so hot. Basically, home prices are at about first quarter 2003 levels.
“Any chance for a sustained recovery will probably need a stronger economy,” says David Blitzer, Chairman of the Index Committee at S&P Indices.