Reports to-day lament the state of the housing market, and for sure the markets around the country are not very healthy. Some housing markets show signs of healing. Home-sales activity in New York, Washington, D.C., and parts of California continue to improve. But other markets, including Tampa, Fla., and Chicago, face rising foreclosures and weak job growth. Low mortgage rates and falling prices have made homes more affordable in many markets than at any time in the past decade. But those affordability gains have been offset for many buyers by tighter lending standards, particularly for “jumbo” loans that are too large for government backing. Banks are requiring down payments of 20% and more and strong credit scores because they must hold jumbo loans in their portfolios.
DUH? Is it just me, or is it not EXPECTED that sales activity would drop significantly after the home buyers tax credit expired? (The Gap has slower traffic when they take the ‘buy one get one free’ sign down….) Is it not GOOD that more homes are not being built? Wall Street wants builders to BUILD LOTS, yet they want buyers to BUY LOTS, yet they don’t want to provide the mortgages to buy …..and buyers think its CRAZY to put down 20% when buying a home?
LETS PRETEND: Let us pretend a few years ago we had not built that much, had implemented stricter lending practices and required buyers to put down 20%….would we even be discussing this topic now?
It is not surprising that with Manhattan’s tougher buying standards, our market is stronger than most.