With the home buyer tax credit ended and the housing market now largely on its own, how can we expect the real estate market to perform? In the term, we’ll probably see home sales slide measurably lower. By the third quarter, it will be up to job creation and consumer confidence to bring in buyers.
One factor that should help the market is the improving availability of financing for second homes and high-priced properties that require a jumbo loan. This market was completely shut down last year, even the best of buyers found it difficult to get financing.
Today, banks are moving toward a more normal lending activity, even in sectors that don’t have government backing. But as the housing market shows signs of stronger health, bigger economic issues are now on the horizon, putting important variable outside the control of our market. The meltdown in Greece could impact the capital position of the U.S. banks, especially if the country defaults on its obligation and Europe says no to providing additional bailout funds to Greece. With global capital at risk, money in the US for any mortgages could once again disappear.