Scared in Austin?

Had a talk with a man at Whole Foods the other day. He was in his 50's, a professor at UT, and was tired and worn out as he had just finished grading all the finals he gave. He was a plesent man, but started talking about the Real Estate market and how scared we should all be. He did not know that I was a Realtor.

No, he did not own any property (a fact that he was proud of) and it seemed to me that 60 Minutes had given him all the facts that he needed to be able to pontificate on our impending doom. Having a professor for a father I do not suffer fools easily, so I went after his facts. he told me that the segment that said that one out of ten homes is in foreclosure.

Now let us think about that. Count twenty homes on your block. By this professor's numbers from 60minutes, there are two on his block that are in default (Defined as more than 90 days late!). That is 10% of the loans are going bad! If the professor is thinking this is possible, no wonder Gilligan, Ginger, and Maryanne get scared!

HERE ARE THE FACTS: You are not those people and common sense will prevail. The United States Government Accountability Office (GAO) put out a report and it says,

Default and foreclosure rates for home mortgages rose sharply from the second quarter of 2005 through the second quarter of 2008, reaching a point at which more than 4 in every 100 mortgages were in the foreclosure process or were 90 or more days past due. These levels are the highest reported in the 29 years since the Mortgage Bankers Association began keeping complete records and are based on its latest available data.

I know that 4% is bad (worse in the past 29 years), but not anything like 10%! Here are the home sales for the Austin Metro Area and then here are the forecasted numbers for loans up through 2010. I see that 2009 is going to be tough, but 2010 is better and almost back to 2007! People move and the 0 down investment times are over. Think about how you can change (if you need to) in order to make sound investment decisions.

Austin has the jobs and the talent, Yes, we are going to be hurting a bit. No, this situation will not last forever. Yes, you make all the money when you purchase a home, not when you sell it. I do not think that we will ever see homes this cheap with the interest rates this low in Austin, Texas again. Homes may go down, but the interest rate will be higher. This is just my gut talking and you know as well I as I do, it might be heartburn!