The Million Dollar Question(s)!

Howdy y’all! Hope you gracefully survived another summer in Arizona, and to our friends returning for our “heavenly part of the year”, Welcome Back! 

                  So what are the Million Dollar Question(s)?  OH MY GOSH…THERE ARE A BUNCH!  How are these for starters?:  Are the Buyers gonna Buy this Season?; Are the Lenders gonna lend? ; Is there any money for the lenders to lend?;  Are we near the Bottom?; And perhaps the Granddaddy of them all: What does this Bail Out Package mean to the Real Estate Market? Whew!  Let’s see if we can even begin to tackle these.

Two weeks ago, my answer to the first question, “Are the Buyers Gonna Buy this Season?” would have been different than today.  In just two short weeks, the circumstances and mood of the situation went from “quite Rosey” to “near Gloomy.”

We have been very blessed with a very active and busy Summer, so my answer two weeks ago would have been a confident “YES! I think the buyers are beginning to sense the bottom,  and I believe they see that Real Estate, in a good area like Wickenburg, is an excellent return on Investment, (if held for 3-5 years), vs. the Stock market which has had dismal returns for the year. So they will pull their cash from the market and invest in Real Estate.”

Today, however, the cloud of uncertainty cast by failing banks, the collapse of Fannie Mae and Freddie Mac and the inability of Congress to decisively craft comprehensive Legislation, has thrown all bets aside.  (Just days ago, one of our Listings, in Vista Royale, fell out of contract, when a buyer freaked the day of the 777 point decline in the Stock Market and pulled their offer!)

By the time you receive this newsletter, they will have likely passed some form of Bill that will be aimed at shoring up the financial lifeline of this Country. What won’t be apparent for some time, is whether or not that Legislation is actually good for the country, or fraught with political agendas in an election year that will leave our economy decimated by over-regulation and beholden to Government control that could literally create a Depression-like scenario.

One thing is clear.  It is not “UNDER- regulation” that caused this crisis.  It was the over zealous politicians who wanted to buy votes by getting as many Americans into homes as possible,  regardless of whether or not they had the ABILITY or the DESIRE to pay back the loans.

This Free Market System still works, as long as you ONLY lend to honest, hard working people who want to repay their loans, and then move up or down in size, depending on their needs. And for this System to work YOU MUST FREE UP REAL MONEY TO LEND TO THESE QUALIFIED PEOPLE!

So the real answer to all of the above “Million Dollar Questions” will revolve around two things:  1.) Will the Banks have the liquidity to lend to the Quality Homebuyers and Business Owners so the economy can get moving again; and 2.) Will those with Cash, feel confident enough to circulate their cash into the system through Real Estate and Businesses.

My optimistic core says “Yes”. I am gambling that there are enough Legislators who truly understand that, all political posturing aside, stringent guidelines are healthy but over regulation will strangle our recovery.  I’m gambling they will release Capital into the system, which will get Buyers to Buy, Sellers to Buy again, and Lenders to get back into the business of making Good Loans.

Which leaves us with one last “Million Dollar Question”.  Will that happen   BEFORE the Election, or AFTER?!      STAY TUNED! 

Statistical Market Analysis for HOMES SOLD IN WICKENBURG  7/01-9/30/2008

Price Range       #of Homes Sold 2008          #of Homes Sold 2007          Active Listings 

0-$400,000                   11                                      11                                  115

$400,001-600,000         1                                        3                                    53

$600,001-$1Mill             1                                        2                                    35

Over $1Mill                      0                                       0                                    20

TOTAL                            13                                     16                                  223