The Problems are the Path: 1980's Recession in Real Estate in 2024

Well Fargo has come to my way of thinking that the rise in interest and the resilience of the public to higher interest rates with their large cushion of cash from the Pandemic will put the FED in a longer period than all expect of high interest rates.

Wells further states that the longer period of 8% mortgage rates will have an effect of dipping real estate into a recession.

Agreed there are a number of RoadBlocks for 2024

  1. Political Unrest and the Global Economy
  2. Influence of Hybrid Work
  3. Housing Shortage
  4. Artificial Intelligence
  5. Labor Shortage
  6. Migration
  7. Real Estate Armageddon: The economy, interest rates and inflation coupled with large amounts of debt coming due in the Federal Calendar and Commercial Real Estate
  8. Supply Chain Logistics and Onshoring
  9. Pricing Resets of Cost of Capital Decrease Real Estate Values
  10. America's Aging Infrastructure
To prepare Home Buyers a lesson in Home Mortgage Selection is highly recommended.
Here are some of the mistakes Home Buyers make when selecting their Mortgage
  1. Focusing Too Much on Interest Rate:  Ultra Low Rates harbor fees that are often hidden that will ultimately have them paying more.
  2. Assuming the need for a 20% Down Payment: The Average down Payment in the US is 6%, Fannie Mae has 3% down mortgages.
  3. Assuming a Loan can be Obtained Instantly: Not So!  Take time to find the right lender and be prepared for paperwork and time answering question from Underwriting
  4. Pre-Qualification DOES NOT MEAN You have a Loan!
  5. Consider First Time Buyers Loan Programs
  6. Failing to Check and Repair Credit Scores of BOTH parties to the loan
  7. Picking the Wrong Type of Loan
  8. Underestimating FEES beyond the Down Payment
  9. Be Prepared for a Low Appraisal
  10. Not shopping for the Right Lender
The thought that interest rates will drop and everything will come back is like the belief "Buying the Dip" in real estate will always work. Dropbox in giving up 25% of their Office Space for $76 million.  This is not the first and it will not be the last.  So prepare and do your homework!

As before, call or write for any question you may have and think of me of your "in the know real estate agent". 

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