Has the chance of buying a home passed by?

If you think that being in the market for real estate right now is akin to being in the market for cyanide tablets, it’s understandable. But it’s not time to go into our bunkers and turn out the lights. Not even almost time.

The news about mortgages, foreclosures and the oft-mentioned sub-prime market is horrendous. And it’s everywhere. As it should be. This is important, even historical stuff. We are coming off the greatest increase is real estate values in decades. Maybe in forever. And the correction is just as dramatic as the escalation.

But the problem has not been caused by real estate itself. The common sense rules of lending and borrowing money never changed.

They were just ignored.

Not by everyone. Just by enough people - and people who knew better - that the shake out is having far reaching impact.

The line said by Gordon Gekko in the 1987 movie Wall Street, “Greed is good”, is famous. And it’s wrong.

As it relates to real estate over the past 5 years or so, greed led many people to make a lot of money quickly. But the foundation for those real estate transactions and the mortgage loans that financed them was rotten. And as we in the real estate world know, a rotten foundation leads to cracks, leaks and collapse.

So, my children, what’s to be done? Here are some of the basics that are boring, but effective:

1. Don’t borrow more than you can afford to pay back
2. Pay your bills on time
3. Save for a down payment (the day’s of 100% mortgages may go the way of the rotary dial telephone)
4. Pay your bills on time
5. Pay your bills on time
6. And, finally, PAY YOUR BILLS ON TIME.

The bottom line is, all real estate is local. Greensboro and the Triad area of North Carolina did not have the 15%-30% (?!?!?) increases in property values as did some places. Consequently, we haven’t had values decline. Boring, but good.

And if all real estate is local, all home-buying is REALLY local. Like, in your lap. If you have decent credit (see rules 2,4,5 & 6 above) and you want to buy a home - have at it. The water’s fine. Rates for conventional fixed rate loans are good, there’s plenty of inventory and the factors that have always made home ownership a great thing still exist.

If you have questions about the news, post a question. If I don’t know the answer, I have a lot of really smart friends. I’ll get you a response.

And pay your bills on time.