Living in Portland

1) it is NO MORE difficult to get a mortgage today than it was 8-10 years ago.  Interest rates are still under 6%.  The main difference is that you can no longer have a credit score under 580, in most cases, you need a downpayment to purchase now, and you must PROVE your income with pay stubs and/or tax returns.  Stated income loans have just about come to an end.  There still is 100% financing - but mostly for those people who are veterans or want to live in a more rural area.

2) regardless of how one feels about the bill that is struggling to get passed through Congress or not, some sort of bill will have to get passed because the credit markets have dried up.  It is not so much now an issue of whether new people will be able to get mortgages as it is whether money will be available for car loans and lines of credits for companies for the purpose of meeting their payroll obligations etc.  This is much bigger than the real estate market or the fortunes of some big banks.  It impacts our entire economy and the world economy.  (Hey, don’t shoot the messenger!)  Think of it as your teenaged son got hold of your credit card and started spending on anything and everything that he wanted because he had no “rules”.  You find out and need to fix the problem and then put some tight restrictions on him so that it never happens again.  Large Wall Street firms found a way to make lots of money on risky mortgages and our government (president, and congress, various departments) did nothing to try to prevent the risk.  There is blame to go all around (Wall St. firms who devised a way to sell the risky mortgages, the companies who funded the mortgages, mortgage brokers who committed fraud or pushed buyers into loan programs they had little chance of affording, appraisers who “fudged” values, borrowers who lied on their applications, realtors who pushed buyers into properties, investors who made “speculative” investments, in addition to all of the federal government types.)  

3) now more than ever, you need to pay down your debt, live within or below your paycheck/budget, and save money.  Cut up your credit cards, pay off the balance each month, or at least get on a plan to do so.   

4) now more than ever, you need to have monies which you have invested to be in many different asset classes (cash, bonds, stocks, real estate etc.) and very well diversified.  In that way, no matter what happens with our economy, you won’t have all “your eggs in one basket.”  Money is safe in banks as long as the account is FDIC insured and you are within the limits - even if the bank fails. 

5) we thought that only the stock market could go down.  Now, we know that real estate can go down as well.  Fortunately for those of us in the Portland area, we have not been impacted nearly as much as other areas and Forbes Magazine actually lists Portland as being the 4th best city in the country in terms of expected appreciation of real estate in 2009.  Therefore, for those people who don’t have a property to sell first, it is actually an incredible time to buy.  If one has a home to sell first, they won’t get what they might have gotten a year ago but then they will get a better deal on a new home - so it should “wash out.”  I’ve got lots of ammunition for your buyers about how it is a GREAT TIME to buy.