A Mortgage/Housing Bubble Coming In The Hudson County Market Shortly?
Anyone reading this will most likely recall the crisis we saw back in 08' when the housing market crashed. We have come along way since those days. Regulations, bail outs, and the FOMC’s quantitative easing have cost tax payer’s in the recent years a fortune.
The question is where do we stand now? I came into this business in 2012 and the only supply of money coming from banks to buy homes was backed by Fannie and Freddie (government money). Banks go to these agencies to use as a tool to create liquidity and this resulted with tighter credit requirements for first time home buyers. At that time, the FED was buying bonds and mortgage backed securities to increase the money supply (inflation), which lowered the rates. Obama came out with the HARP program and this was all to help people save money on refinancing their mortgage. More money being saved, more money being spent, and more jobs are created. Supply and demand.
Now, 5 years later and refinances are almost unheard of. The Hudson County Market has 4 times the amount of buyers than sellers. Trying to buy a multi family below asking is unheard of. Investors buy multi families and convert them to condo’s. Just think about that…. a 3 family home being bought for $400k and having each unit be sold for $400k with no actual data to back up the price. Hedge funds and private money have come back in the game. The fed sure did create inflation but where does that leave us? Programs with 1% down, 500 fico scores, 1 day out of foreclosures, etc are starting to become more and more popular. Will this market crash down the road? The bank is the black jack dealer, the government is the casino, and the tax payer is the player!