In my Nov. 30th blog, I wrote a story about how I feel this is the time to buy. Today, I heard on the news that the Feds will be rolling out tomorrow, a plan to freeze sub-prime interest rates for 5 years, to stop the flood of foreclosures. If this government plan works, that means all the sub-prime loans that were about to re-set to a much higher interest rate next year, forcing short sales and foreclosures, will never happen.
With less forecloses coming on the market in 2008, we will see a housing stabilization. In areas such as Palmdale and Lancaster, where foreclosures and short sales are the market, this government plan will dry up the existing foreclose inventory. Therefore, if you have been sitting on the fence thinking about buying, with the idea that pricing will go down even further generated by more foreclosures bloating the market, you will not have much more time to think about it. Someone else may snap up the short sale that you have had your eye on.
Now, I have heard there are some conditions to the government plan. All the details will be announced in tomorrow’s news.