March 6th, 2012 2:46 PM by Gregg Mower
Well here in California it is starting to look a lot like spring. This weekend we had a booth at the Sacramento Spring Home and Garden show and I think it well all things considering. The signs of a slow economy was evident in that there were a bunch of people that went to the show but there were not the usual full bags of give-aways people always tend to cart around at the show. The outside temperature was in the mid 70s and I think most folks were just out to see if there was anything new they had not seen in the last few years. Of course, holding a booth open for home loans we were really hoping to get the first time buyer types out talking with us. Astonishingly we only talked with a handful of folks that said they might be interested in buying a home in the next few years. This was a little unsettling as the Real Estate Markets are cyclical and first time buyers will always follow investors into a depressed real estate market. There are still plenty of investors in the market today but not the first time buyer yet.
The first time buyer is probably the single best thing for our economy. Why you ask? Well a first time buyer will have to move into the house and fix it the way they want it to be. These buyers are in the prime of their spending lives and the more people spend the more products are produced and the more product produced the more jobs to produce them, ship them , stock them, and sell them. That spells good things for our economy. So when I go out to a home show and see mostly retired folks walking the isles I know that we are still in the grips of a very poor economy.
At our booth the main topic of conversation was the Home Affordable Refinance Program (HARP). This is the program designed to help home owners refinance their home when they owe more than it is worth. As I write this it is still unclear if we will even be able to write the new HARP 2 program as there are no aggregators our there willing to buy this product. In addition warehouse banks are not opening their arms to lending more than a home is worth either, so it goes a bomb that could be and probably won’t be. I don’t like to be negative but until the middle class American can feel comfortable with their finances they just are not going to be buyer of goods and services that are not absolutely necessary for their family. So all I can say is buy a house and help the economy.
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