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  • Jeremy Hart, Real Estate Professional in Blacksburg


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September 16, 2008


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Tom Vanderwell


Very well said. Thanks for linking to what I wrote. I think that the biggest impact this might have on the real estate market is if it pushes consumer confidence through the floor and causes people to hold back that way....


RU Alumni

Other than printing more monopoly money, where is the Fed (a separate, private organization) going to get the BILLions needed for these new bailouts? Given many years of multiple wars, the US Government certainly doesn't have it in its piggy banks. Need a precendent? Will we call this the GREATer Depression? The safeguards that helped us out of the 2000-01 crash were eviserated by lobbyists promoting efforts that weakened financial and consumer protections. This is the tip of the proverbial iceberg.

Jeremy Hart

Tom - someone contacted me offline this morning and said the same thing. You - and they - are right. Consumer confidence will be a key to how we move forward from here.

RU Alumni - I just don't see it. I think in the short-term we'll see continued drops, but in the long-term the credit tightening and reduction in size of these major brokerages houses will create an upswing. It will be slow, as consumers battered by financial losses and housing woes will be unable to get credit, but with money down and good credit scores there will still be loans available. I'll be the first to admit that I know it sounds like I'm a cheerleader here, but that's my $.02. And there are plenty of others far smarter than me who can tell us more!

Toronto real estate agent

Exactly my thoughts - I believe this crisis is pretty fuelled by media, which are causing panic and this panic continues to rise pressure on financial institutions. As realtor I feel pretty endangered, especially now, when Canadian market is on the razor's edge. But I keep positive thinking - bread is still being baked, factories are working, both unemployment and inflation are mild - why to start panicking? We have survived worse events...


I disagree. This crisis originated in the real estate sector, and it is going to and it is going to come back to roost in the real estate sector. Cheap credit is coming to an end, and incomes simply have not been rising, meaning people have depended on credit to expand their lifestyles. Without cheap credit, a lot of stuff will slow down, and the real estate industry will too. Furthermore, more regulation is coming and even if mortgage rates are low, 20% down is hard for people to come up with. This is not a psychological problem: there are severe strutural weaknesses that have to be fixed before we're out of this.

Jeremy Hart

Sammy76, thanks for the comment. The housing sector has certainly contributed to what could be coined "cheap credit", but it certainly doesn't bear the brunt of responsibility, in my opinion. Nevertheless, you're right that credit has been the lifeblood of the consumer in recent years. I think I read somewhere - and this has certainly not been researched so don't quote me - that we had built up a $7 trillion reliance on credit. $7 trillion is a big number to try and wrap my head around, but I'd guess the housing sector is not to blame for all of that.

Be that as it may, you are dead on that we've created a reliance on credit that needs to end. It may affect housing, certainly, but I don't think it's going to create a depression, particularly in the housing arena, which is why I said I don't think it'll affect housing much. I think solid credit scores and money down WILL be key, however; that alone will most certainly take some buyers out of the market, but already we're seeing buyers jumping INTO the market because the opportunity to buy is too good to pass up.

Here locally, I don't think it affects the number of people moving into and out of the market. It's going to be interesting to see in 12 months how it all shakes out.

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