Spring Fever
Just how sick is the housing market? It's time to find out
That's what led Suzy Buckley to keep her cashier's check in her pocket when she attended a real estate auction in Miami earlier this month. "The number I had in my head was $510,000, which would have been a really great deal," she says of a South Beach condo that had previously been listed for $799,000. But when other bidders pushed the price above $600,000, "I figured, no reason to jump in yet," Buckley says.
With the local market flooded with condos and as many as 20,000 more units due to be completed in the next two years, "it's a good time to be looking around," says Florida housing analyst Jack McCabe. "But a year from now may be a better time to buy."
That is, as long as you still qualify for a loan. The escalating fallout in the subprime market is already making it harder to secure a loan as regulators clamp down on loose lending practices and banks scramble to tighten credit standards.
Drying up. In just the past two weeks, Boulder mortgage banker Lou Barnes says he has received an almost hourly stream of directives from lenders anxious to reduce their risk. One all but eliminated loans to borrowers who can't sufficiently document their income, while another stopped lending to anyone who can't come up with a minimum 5 percent down payment.
"Anyone going for those kinds of loans should expect the whole process to be a lot more uncertain than it was in the good old days," Barnes says of the credit tightening. "But it will be better in the end, because more people who qualify will actually be able to afford their payments."
That's cold comfort to Davis and Griffin, who have already seen one deal fall through since relisting their house. "I still feel like we're at a fair price for where we live," Griffin insists. All she needs now is a qualified buyer who feels the same way.
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