Feb 7, 2008: A Stranglehold on Mortgages and Other Market Notes:

"Banks are tougher on mortgage lending." We've known this for some time; that's not news. However, to see the results of an independent survey are somewhat distressing. The impact of last summer's credit crisis continues to grow; banks are more risk averse and, as one pundit on CNBC said this morning, they need to make sure the people they lend to can actually pay their mortgage. Not a novel concept, just one we as an industry ignored for a few years. Despite some of the goods news below, the banks are re-asserting their control of cash. Click here for the story on how the banks have tightened credit.

Interestingly, despite this tightening, applications for mortgages increased to a level we haven't seen since 2004. Based on some conversations I've had with area mortgage brokers, I suspect that some of this flurry is re-fi work, multiple applications and pre-approvals. This creates an interesting dichotomy in the market which only adds to the confusion. Click here for that article.

Notes:
This is a very difficult time for anyone buying or selling a home, particularly home sellers. A few notes on what we've seen in the first four weeks of 2008:

1. Buyers are out there. We have had many, many showings for our listings and we've had a number of buyers that we've been showing houses to.
2. Prices are moderating. There has been a noticeable, downward adjustment made to New Listings. This is good: we need to see a more realistic trend in North Shore prices.
3. Homes that are well priced sell, usually quickly and even in multiple offer situations.
4. Inventory isn't as vast as the news media would have you believe. There are actually not as many homes to show buyers.
5. Buyers are still taking their time. We're back to a more realistic process in which buyers actually take the time to consider a home, its appropriateness and its price.
6. Buyers will dig in their heels when they determine what price they want to pay for a home. This shifts the decision on whether to sell to the Seller. But, at least the Seller has a degree of choice in this matter and that means it's really not a Buyers' Market.
   

Check back; there's a lot of news coming up that will have a direct impact in the housing market.

DS