As I live my life in McKinney, Texas which is about 30 miles or so north of Dallas, I feel conflicted. I watch and read the news almost every day and therefore I know that according to most reports, our economy is in the toilet, no one can find a job, it is impossible to sell a home and that greedy bankers and politicians are to blame. But I also have my own helpful tool...I have a brain that functions and allows me to think for myself.
I go to retail stores and the parking lots are full and restaurants have a wait to be seated (unless you want to dine and an ungodly early hour). So if the economy is so bad and people are starving in the streets, how can people afford to shop and dine out?
Now I am not so naive that I think that it is this way in all cities across this great country. I know that in Detroit this is not the case. However I don't live in Detroit. I live in McKinney. Where the unemployment rate is fairly low (in comparison to other cities) and the cost of living is quite cheap.
I get asked all the time with a tone of depression and a hint of a scowl, "How's the housing market?" It's always asked as if they are expecting me to confirm their believe that our home market is awful. I won't give them the satisfaction of that response.
Is the state of our housing market as strong as it was in 2007/2008? Of course not. I'm not Pollyanna about everything. I have watched for a while with much disdain the media reports of a horrible housing market. This irks me for a few reasons:
1.) The report is a whole of the United States. It includes Florida, Michigan, and Nevada in with states like Texas and gives the whole country a "bad name". If you removed those three states out of the report, it wouldn't look that bad.
2.) These reports tend to keep people paralyzed by fear. They naturally expect the worst, and it's my job as a Realtor to report the facts and calm the hysteria that the media is so good at creating.
"Well why are foreclosures so much more abundant now than there used to be?" This is another question that I get asked and it's a good one.
Things have changed. There have been job losses. Some people who lose a job and can't or won't adapt will remain with financial problems. Their mortgage payment can't be paid and they are frozen by fear. Eventually the mortgage company will foreclose and quite possibly come after the homeowner for the difference which will possibly force a bankruptcy claim.
In 2009, the US government in its infinite wisdom launched the Making Home Affordable program. This was designed to ask banks to modify existing mortgages that risked default. The idea behind this was noble but ill-conceived. The banks had no obligation to modify the financially strapped homeowner's mortgage.
If you Google 'Making Home Affordable', you will put up hundreds of pages with info on this. The homeowner is encouraged to stop making payments to get behind and apply for the program. The problem is, that over 90% of all applicants were denied and instead of short selling their home, they ended up losing it in foreclosure. For some of the "lucky" ones who did get approved, they still lost their homes because they could still not afford their new payment.
This program offered up a lot of false hope and people didn't work out a short sale with their lenders and got foreclosed on instead.
The last type really bothers me on a moral level. There are some people that decide that their mortgage payment just isn't convenient for them. Since their are so many short sales and foreclosures on the bank's books, why not just stop paying and life at home rent free for a while. These people can afford their payments and signed up to a legal contract.
So while there are foreclosures out there, it's not quite as bad as it may seem. If you have a desire to move up in house or buy your first home, now is a great time. With interest rates so low, and bargains to be had, you could luck out!
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