With so many people in house payments they cannot afford and since the new plan from the Bush Administration does not help everyone, the real estate market will not bounce back as investors would like to see. The Plan only covers individuals from January 2005 through July 2007; and those loans must be slated to adjust between January 2008 and July 2010. The Plan also does not cover those that have fallen behind in their loan agreement.

Many financial advisors and stock advisors believe the real estate market will still head downward. Jim Cramer of Mad Money believes this will be a trend for the next 8 months while others are speculating the first or second quarter of 2009 before the market returns to normal. Just because there is a plan in motion to aid homeowners, does not mean all will qualify and that is not the only reason the real estate market has burst so to speak.

Yes, many people applied for an adjustable rate mortgage, which has caused their loans to be unaffordable; however, the housing market along with many other items is governed by supply and demand. When there are several houses on the market and not enough buyers searching for homes, the price of the homes will go down. On the other hand, when there are several people looking to purchase a home and there are not enough homes then the prices of the homes go up.

One of the reasons the housing market is not booming as it was a few months ago is that almost everyone was out getting loans and the banks were pretty much giving the money away. No one was considering that there would come a time that these same people would have problems making their home loan payments. On top of this, several individuals purchased homes with the idea to flip them, which meant they only bought the homes to resell them. Now, those wishing to flip their property are not buying because they have homes that are not selling, which adds more homes on the market. Another big reason there are so many homes on the market, is that home builders are still building.

With all of these homes sitting there waiting to be sold, the supply of homes is over the top, on the other hand, there are not as many buyers out there. Before the real estate market will begin to return to normal these extra homes on the market must be sold. Once the supply is diminished, the demand will even out and we will see a return to normal.

This entry was posted on Saturday, December 15th, 2007 at 9:14 am and is filed under San Diego Real Estate News. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.