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These days, we have to take our good news where we can find it. So which of today’s major stories do we focus on: the decline of existing home sales to a nine-year low, the first annual price decline on single family homes in 40 years, or the decline of mortgage rates to their lowest level in four years?

Given the seemingly endless stream of negative numbers we’ve discussed here, the interest rate news is welcome relief. Maybe it’s not worthy of a ticker tape parade, but it may well help the market in several ways:

  • It provides a possible way out for some of the 2 million homeowners who face ARM resets this year. For every home that avoids foreclosure, we stave off a sickening chain of events that ripple through the industry, hurting everybody.
  • It reminds people that – subprime crisis not withstanding – there is mortgage money to be had at some of the lowest rates in history. That could just bring some buyers in out of the shadows.
  • People are once again starting to refinance at lower rates, either reducing their debt more quickly or freeing money they can spend in other ways, stimulating the overall economy.
  • It immediately makes homes more affordable. The lower the rate, the more the buyer can afford. This will both stimulate sales and help shore up prices.

I wouldn’t dream of making any predictions, but it wouldn’t surprise me if, a couple of years from now, we look back on this week as the bottom. To be candid, it wouldn’t surprise me if things kept going downhill for a while either. A train like this doesn't turn on a dime.

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There was quite a bit of news today indeed. Jobs and the overall security of that market will impact the real estate market. There are many factors to determine exactly where we are and where we will be... I don't even think the government knows quite where things are going. A war in Iran or other spikes in the Middle East could cause an instant relapse of anything positive that has begun. The presidential campaign which seems to be more like a feature on Entertainment Tonight than CNN anymore when we need serious issues addressed and discussed. We'll see how that shapes up in the coming months and a lot will depend on which side gets in. The whopping $1,200 rebate announced today must surely wipe out the foreclosure problem and lack of health care in the country. That was a great used band-aid move. We're sitting ducks and everyone has an opinion. There are 50 topics that could be debated and talked about and still wouldn't produce a solid answer on the real estate market's future. Good agents can work right through these times and still survive and even do well as others drop out. Pehaps it's a blessing for the industry in a sense to weed out the part-timers and ones that don't have a solid business plan implemented to handle these situations. Rates are not guaranteed right now. We can't promise anything to a potential buyer because if we start looking today and find something by next month, the rate could change and we're back to square one. It's day by day. Ultimately, there will always be a need for housing as with food. We mold with the times and continue on regardless. Whether it's catering to the investor while rental properties and the need for increase, or it's downsizing. There will always be buyers and sellers. Perhaps there are just too many Realtors, builders and brokers which are adding to the problem. Desperate times call for desperate measures. We need to try somehow to weed out the desperation.

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