http://biz.yahoo.com/rb/080109/usa_economy_goldman.html
In a note to clients, Goldman said real gross domestic product would contract by 1 percent on an annualized basis in both the second and third quarters.
They're predicting a minor and short recession. Ok... you can stop laughing now. But take a step back and notice that they're predicting the economy will hit the skids right when most people try to sell their homes. Do you think this will have a further impact on sales? Might GS have neglected to take into account the impact of the tightening mortgage market?
The old advice is always buy real estate when its tough to get a loan. We're not there yet. This is but one more bit of proof that its best to wait. Get off the fence and join us in the bleachers. We have at least two years before its worth risking entry into the house market.
Got popcorn?
Neil
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2 comments:
The old advice is always buy real estate when its tough to get a loan. We're not there yet.
I agree, we're nowhere close when it comes to conforming loans.
A coworker is refinancing out of his option-ARM (the last remaining OA holder to do so) and is going into a funky 30yr fixed, with some portion being IO. Yeah, whatever, at least the rate is fixed. But this is why I think the option-arm portion of the reset graph is overstated - there was, is, and will be lots of time for them to refi before the loans reset and the number of OA loans will only go down. 3 of 3 coworkers of mine with OA loans have refi'd out of theirs, and I imagine that this general trend is global.
Sandman,
I agree many will refinance. No problem. Now what about all of those that are underwater?
There are enough of those to weaken the market.
Got popcorn?
Neil
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