Well contrary to popular belief (I am a professional buyer’s broker in the metro Columbus, Ohio real estate market) the Obama Stimulus Package as signed will be LOUSY for housing and only delay the recovery!

What?  Aren’t many housing groups and builders in favor of it?  Yes they are, but that doesn’t mean it is good for you or us (the U.S.).

I’ll cover the details of the Federal Tax Credit for first time buyers in my next blog post, but for now the renegotiation of “toxic assets” is only going to prolong the recovery.  Here’s why…

Let’s assume there are 100 homes in the whole USA.  About 60 of them are owned free and clear.  40% needed financing of some kind.  So of those 40 homes that needed financing 4 of them were purchased by people who really should not have been allowed to buy them, but greedy builders and banks let them buy with no downpayment, no closing costs and below market interest rates.

So now these 4 homes are in default.  Once they get foreclosed on and repurchased they will no longer be on the market dragging everyone else’s home values down.  But by allowing “toxic” homeowners to slide with renegotiated loan rates will only exacerbate the problem!

Other neighbor’s who are holding on barely to their homes will look at their bailed out neighbors and say to themselves, “Gee, let’s stop making payments so we can get a better rate too!”  And when that happens another wave of defaults will occur - trust me!

Here in the metro Columbus, Ohio housing marketplace we have been in a decline since around 2004 when we noticed the number of Buyer-Clients we were helping each year began to contract.  So we’ve actually seen a company wide reduction in the number of Buyer-Clients which we think hit bottom in 2008.

It’s interesting that the Ohio Association of Realtors reports that our 2008 sales volumn is “just as good” as 2001.  While the sales volumn statewide is at the same levels as 2001 what they don’t mention is that a portion of these “sales” are distressed - either foreclosed properties, short sale properties (where the seller owes more than the home can be sold for and the lender is “willing” to take less for the payoff) or distressed sellers who have enough equity to sell for much less than normal.

What’s interesting is that once these bank owned, short sale and squeezed sellers get re-purchased (snapped up) by new owners then the market will slowly begin to switch to slowly appreciating property values.  I testified last Summer to the New Albany Board of Education that this trough will last at least until the Spring of 2011.  In my professional opinion that is when we should see these bottom deals fully absorbed and actual suppy and demand equalizing since the 2002/03 era.

Of course it goes without saying that governmental intrusion will only delay this “self correcting” market.  And who knows when they will finish tinkering with the housing market!

The last think builders should do is begin building again.  Sit tight and wait.  They only further the delay if they begin to crank out the single family homes again… but that’s another post!

I was on Bob Connor’s AM radio show on 610 WTVN two weeks ago about the so called shortage of mortgage money that seems to be spewing from the media recently.  It simply is NOT true!

If mortgage money was that tight or if investor’s found it soooooo undesireable then we’d have interest rates that would have skyrocketed!  Instead of 6% they would be at 16% on a 30 year fixed rate mortgage!

But here’s a news flash - rates continue to hover right around the 6% mark which is what it’s been percolating at for many months.  And you must keep things in historical perspective…

In 1983 I got married and we bought our first home using an Ohio First Time Buyer mortgage at a great rate of 9.98%.  Yes, that’s right - basically 10%!!!  Why was I happy?  Because regular rates were about 12 and 1/2%.  So a hair under 10% was a great “deal” at the time.

Bottom line - as a home buyer this is absolutely the best time to buy since the mid 1970’s.  The market has too many sellers and not enough buyers creating a “buyer’s market” and interest rates are still great (gad, I hate sounding like a Realtor!)  We are getting absolutely STUNNING DEALS for buyers…

Perspective people!