Lower prices and higher interest rates will only help if you are paying cash.

If you are getting a mortgage, a small uptick in rates significantly reduces the amount of home you can buy.

Prices may drop some, but what really drops is your purchasing power!

All the Best,
Jim Sweat
941-306-7384
Team@JimSweat.com

Brian,

The idea behind this settlement, as with many other bailouts, is to help stabilize the housing market. The reasoning being a stable or less distressed market will support prices going forward and trickle down to improvement employment, consumption, etc. So, if anything, home asking prices should go up in theory. But, like many government programs, this attempt is a mere drop in the bucket. $26 billion sounds like a lot until you consider the trillions in equity lost during the housing correction. Maybe a few hundred thousand homeowners would be helped in saving their homes. Yet, with millions of distressed properties still lingering and a market that regularly turns over 4-5 million homes a year, that bit of help is no better than a rounding error.

Nationwide, there are still plenty of reasons for further weakness in home pricing this year. However, there are isolated pockets, the SF Bay Area being one of them, where prices have been firming up and are expected to climb this year.

Hi Brian,
NO, but higher interest rates will lower asking prices. So wait until interest rates are 7-8%. Wait another year or two to buy, prices are declining. Good Luck

Hi Brian,

It could lower prices if the provision in the most recent settlement that allows States to reduce the principal amount owed to the investor. The reason is less investors will provide money to mortgages if there is a possibility a State could reduce their principal balance.

On the other hand, http://www.FHFA.gov is soon going to package up a lot of the foreclosures and sell to large investment firms on the agreement that they will have to be rented out for 3 years. That may instantly reduce the inventory.

Also some lenders are now offering $3k to Sellers who do a Deed In Lieu of foreclosure versus a short sale. My guess is those properties will also be "packaged" up to be rentals, too.

So if supply of homes decrease because they are now becoming rentals then prices will have to go up.

Good luck!
Alma Kee http://www.SoldOnTampa.com

Are you referencing the $25 billion settlement banks have agreed to help homeowners? If that's the case, I'm really not sure how that would lower asking prices. Team Rotondo makes an excellent point about supply being smaller as more people are able to keep their home.

The issue with listening to the news is that they talk national numbers which is not relevant to local markets. The numbers discussed are averages, generalizations and speculation based on what is happening in 50 states. Best way to educate yourself is to look at the numbers for the area you live and purchase in.

Hi Brian,

These new government programs will likely not have much effect on prices.
Past programs have not been utilized by anything near the number of people they were supposed to help, and this one will play out over time as a "wait and see".

If it reduces the number of homes that go into foreclosure, prices will be pushed up because of less demand than expected.

http://www.heraldtribune.com/article/20120209/ARTICLE/120209…
is an article touching on how small of a relief effort per homeowner this large number represents.

Check out our Facebook page for more information on the market and fun things to do in Southwest Florida.
http://www.facebook.com/skgflorida

I also have a few blogs on my Trulia profile that may be of use to you when considering values on homes. That information is pertinent all across the country.

http://www.trulia.com/blog/jimsweat/2011/11/would_you_sell_o…

All the Best,

Jim Sweat, ABR, CRS, GRI, CDPE, e-PRO, ILHM
Realtor
Sandals Realty http://www.ExplainShortSales.com
941-306-7384
Team@JimSweat.com

Brian,

The way I see it...it will raise prices because less people will lose their home or have to sell their home. Supply is smaller so prices will increase.

Brian,

Asking prices should be driven by the most recent sale activity within an area. Bail outs are intended to support the market by helping owners through difficuld economical times. I don't see the connection.....

On the other hand, an asking price in the current market, simply identified a desired price the seller would like to receive. In the majority of the Florida market, very few sellers are able to recognize their asking price and understand this when assigning it. Working within this context could help get you where you need to be.

Good luck,

Bill