What’s In the Forecast For the Real Estate Market

In a Market Update written by Jennifer Eggen, Regional VP of Wells Fargo, she offered that before we see a market change, the housing market prices have to stabilize so that banks and investors can have harder number to calculate risk on REALLY how much equity they have in their investments. You can see that if they have say, $1,000,000 (small number for easy explanation) loaned out, and they find that the total amount of loan plus assets are $2,000,000, then they know they have 50% equity and can calculate where to loosen guidelines. Jennifer Eggen also reflected on former Fed Chair Alan Greenspan’s expectations of the bottom of this crisis finally being in our sights, and that we may likely see that turn we all have been waiting for in the first half of 2009. Greenspan is probably one of the most well respected experts when it comes to forecasting, so that should leave us all with some hope. Concluding that thought, the housing “starts” a couple weeks back showed an increase, but last week reported a fall…just a sign to say that the volatility is NOT quite in the history books yet.