The Bizzarro World of Wall Street and Real Estate Financing

Westcoe Realtors, Riverside California…For those of you who may have missed out on the Superman comics as a child, there was an alternative place called “Bizzarro World” that essentially mimicked Superman, except everything was basically backwards.  The Bizzarro Superman meant well but generally goofed things up, and always made a mess of our world (as well as an interesting story line) when a time warp allowed him to visit.  Good intentions were often overshadowed by the disasters created when the Bizzarro Superman tried to “help” the real Superman.

Any of this sound familiar with our current financial world?  Welcome to the Bizzarro World of finance.

All politics and political parties aside, as well as any feelings you may have about whether 700 billion dollars is appropriate to bail out the financial institutions who created this mess (OK, perhaps a small amount of sarcasm there), the question of the day is…just what does all this mean to real estate right here at the street level in good old Riverside, California?

Well, as best as we can tell, the answer is…..not much….which one of my banker friends tells me is precisely the point.  While I will spare you the philosophical arguments, the net result is that at our every-day retail level for housing financing, nothing much has changed.  Financing is still available, and the only caveats to getting it is that you need to have some sort of down payment (anywhere from 3.5% on up), and the ability to demonstrate that you can actually make your payments on time.  Not too much to ask, really.

As for foreclosures, they still drive our housing bus at the moment, and it will take some time to see if the government bail out of the financing industry has any effect on the number of repossessions already here, and in the pipeline.  My guess is that it will take some time to see any results in this area, but what do I know…I still think 700 billion is a lot of money.  Essentially, for now, it appears that all real estate business is proceeding along as normal…assuming there is any definition at all of the term “normal.”

In the end, do not despair…at least with regards to housing and the availability of funds at our local level.  Yes, Congress still needs to pass this aforementioned 700 billion number and give ultimate power to the Treasury Department, and everyone knows if it can be messed up, Congress is certainly capable of doing so…but let us all hope the “experts” know what they are doing.  In the meantime, all is well with the local markets, and we hope it stays that way.