Crisis & Bailout

Was that noise I heard in September people buying houses or just the thud of the !CRISIS!, and where the hell is that bottom anyway?

Did you take a look at those September statistics on my stats page? Huh, Didja? Because, if you did, you’d see that we were up for September! Yes, you heard me right. We were up! As in, more sales than August! Shock of shocks, it’s true. And let me tell you, I saw it from the ground. The first three weeks of September I was deluged, and quite happily so, with buyers who came out of nowhere. In fact, I had been predicting that people would hit September and say to themselves, “It’s the Fall. That’s supposed to be the bottom! Let’s check it out!” And that they did.

So, is this the bottom? Is this the end? Is it up, up and away from here? Did you notice how I mentioned “three weeks”, as in a finite sense? Well, there’s a good reason for that. You see, the new buyers stopped coming right about the time the good old news media found a new way to hit us all below the belt . . .

!CRISIS! Yeah, you heard me, I said !CRISIS!. And that’s the way I will spell it from now on, and if you see me in person I will put my hands to the side of my face and give you the pained shriek look from the painting “The Scream”, because I have discovered you can’t discuss the !CRISIS! without panic and hysteria. It’s like eating jelly without peanut butter, you can do it, but you won’t get the full effect.

And so, dear reader, I tell you that buyers were stopped in their tracks by the !CRISIS!, and not just by an over zealous news media, but by the very same banks that caused much of this in the first place with their bogus loans and lack of income verification, and even flat out income reporting fraud, who found that they no longer had enough money to lend. Loans dried up very quickly, and perhaps the scariest sign of all was that our incessantly lazy and self centered President got out of his easy chair for a few hours and actually tried to DO something! God, that scared the bejeezus outta me! I mean, if he’ll sit through Katrina, and snoozed halfway through an attack on our Country’s soil, when he gets up it must be awfully serious!

Our recovery was killed right as it got started. And I don’t blame the buyers, I’d have sat out a bit and watched the skies for a few months myself. That’s just being prudent. But, there is good news. The !BAILOUT!, derided across the Union by folks who don’t like seeing sharks in suits steal our cash, is actually starting to work. The money it provided is starting to slither its way through the dark underbelly of the reptilian banking sector. How can you tell? A 24 hour viewer of CNBC like myself can tell you that LIBOR is coming down. LIBOR reflects the risk of lending capital between banks- a high LIBOR means that it is hardly worth loaning money, as you will pay too much to whomever you have to borrow it from to re-lend it, whereas a low LIBOR means that all is clear, and that banks are able to profit from loans again. That is merely a layman’s description- hit CNBC for more on that one.

But banks are beginning to lend again, and we can look forward, I believe, to a Springtime where people feel happy to have a smart President once again, where spirits are lifted by the site of children playing in the White House once more, and yes, where banks can lend money with a portion of the freedom they once did. We are not going back to easy loans, thank goodness, but we are going back to responsible loans that will be freely available to folks with a traditionally high beacon score of 720 or more, rather than the 800 or so needed now. And we should be going back to 90% loans, maybe even 95%, though probably not 100%.

I believe we are at the beginning of the bottom, and we will continue to build that bottom over the Winter. Spring should be better in many senses of the word, and I continue to feel that we will have a real “Morning in America” happen with the change of the presidency. Positivity will be in the air, a new day will be dawning, and if ever there was a promising time for housing to stabilize, that would be it. Signs point that direction- Buyers coming out, Loans becoming more available, finally getting this god awful election season behind us, and a new family in the White House- a young family with smiles and energy that will lift all of our spirits. I doubt we will see prices shoot up any time soon, but as we are down a good 40% or so in real market value terms, we should see some leveling off in 2009 -the year I originally said this would end, way back in Fall 2006.

Of course, I could be wrong.