Hi taxpayers, welcome to another government bailout. I remember being on Wall Street (DLJ) twenty years ago and hearing an analyst talk about what a unique, sweet deal mortgage agencies had — this was probably even before these two grew into giants, but at least someone saw what was coming.
However, it’s 2008. Ron Lieber did a good job of giving broad perspective about the bailout in this New York Times article.
Specifically, though, we saw mortgage rates dive 3/8s of a point yesterday. That’s a huge one-day drop, and it puts us at a pretty favorable, 6% benchmark. (If you want real mortgage specifics, talk to Dave Steinberg, a mortgage broker who publishes Ratewatch — here’s his firm’s website.
For buyers, that should provide a little reassurance through the fall. If you think New York City is going to tank, you’re not buying until 2011 anyway. But if you think NYC is seeing just a slight recession (I’m in this camp) then we’ll probably see flattish pricing for a couple of years, and if prices are flat you obviously want to jump in when you can get the cheapest money possible.
For sellers, it makes the question of “what price do I list at?” more relevant than ever. Buyers aren’t biting at listings that have 2007 pricing. We are, however, seeing apartments move at “proper” pricing — that means units that are in line with what’s closed in the past three or four months, and that can hold their own against the competition that’s for sale.
Obviously, a downward tick in mortgage rates makes this process a smidgen easier.
Strap on your seat belts for a long ride — in prime Manhattan, we are looking at four to eight months between list and close — but you should be happy with the deal you get at the end of it.