In 2008 we did have a housing fall because of the credit issues and mortgage bonds in some cases where graded incorrectly. For example there where bad mortgage bonds being rated better than they should have been.
They where sold in packages that represented a better bond than they actually where.When that happened the mortgages did not perform, meaning the person paying the mortgage quit doing it! This caused a lot of investors to take huge looses and killed the mortgage market. Basically a lot investors did not want to take the risk of purchasing mortgages for their portfolios.
When there is no one to purchase mortgages the real estate market goes bad, because the liquidity (money) is not available to get mortgages. Therefore people could not get mortgages to purchase real estate with. This caused inventory to get saturated with a lot of homes and demand was not there to purchase homes. With buyers having no way to get loans to purchase homes, cash buyers came in and paid much less for the real estate.
The American government is also making sure that this crisis will not cause a lot of homes to be foreclosed on. How are they doing that? By letting the missed payments (up to 3 I believe) being added to the mortgage. This will allow the home owner to get back to work, save a few bucks and keep their homes.
The key to the economy is getting people back to work, and that should be happening very soon. Real Estate will be in huge demand and interest rates will still be extremely low. The economy was very strong before the crisis and that should continue.
I have been in the real estate since 1985 and have seen a lot of different real estate markets, and have purchased and sold 100's of homes. This crisis is different and our economy should bounce back very well. That means that buying real estate today is a very good thing!
Call me I'm Brett 216-703-5740 Icon Agent at EXP Realty Ohio and #1 Agent for EXP Realty in Ohio. You can also text "information" to 1-937-500-0745
