Brevard County Market Watch 5

Fannie Mae and Freddie Mac provide more than 50% of mortgage money here in the US. They either buy mortgages from banks or they lend money through loans. Their problems have grown due to the decline of home values across the nation.  This has created a huge negative effect nationally and internationally. The government stepped in to bailout out Fannie Mae & Freddie Mac on September 7. This takeover will provide some government security to financial markets, and change the dynamics of our market. 

So, far we have seen mortgage interest rates drop. The hope is to spur the economy. Will this bring more buyers into the market?  And how far down will rates go with this takeover?

What is the fallout to all of this?  Who is going to foot the bill for this takeover?  All of us, the American taxpayers! That’s who!

Many banks are experiencing huge losses because of their shares in Fannie and Freddie.   We could see smaller banks folding. 

What can you do to protect yourself in the changes that may be coming? Make sure you have no more than $100,000 in any one financial institution.  Make sure that your bank is FDIC insured.

Work towards paying off your credit cards, if at all possible.  The credit card companies may review your account. They may close your card or they may change the terms or rate on your cards.

Pay down your HELOC, Home Equity Line of Credit.  These may be reanalyzed, especially in declining markets. They may close lines of credit or require quicker repayment.

Consider your car loan.  Pay it down if at all possible. 

The less money you owe, the more it will keep you out of the potential firestorm that may come. 

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  Did you know that there are currently over 2 million houses sitting empty in the US?  Some of these houses are wreaking havoc with their local code enforcement offices. Many are unkempt, in disrepair and ill maintained.  Some are full of rodents, termites, transients and/or partying people.  We are hearing stories of some being set on fire.  Many owners are out of state banks.  Today, many are being sold at bargain basement prices.  On the other hand, I have seen some on the market for over 2 years now. What is a neighbor to one of these properties to do, when no one wants to take responsibility for these eye sores?

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Brevard’s median sales price for existing homes was $152,600 this year, compared to $195,800 last year.  Statewide figures were $193,900 this year, compared to $238,900 last year. However, interestingly in 2003 the median price in Florida was $164,000. The median price is half the homes sold for more and half sold for less. Foreclosures and short sales are driving prices down.  Short sales are properties that are being sold for less than the balance of the existing mortgage.