The private banking system has done it’s job since the Great Depression, but the international potential for bank dominoes to keep falling prompted the federal government to take an ownership stake in 9 large banks as part of the bailout.  That means you and I will own a stake in these banks as citizens of the USA.  The banks involved initially are Bank of America, Merrill Lynch, Bank of New York Mellon, Citigroup, Goldman Sachs, J.P. Morgan Chase, Morgan Stanley, State Street and Wells Fargo.  These banks have agreed to limit top executive compensation and golden parachutes as part of their participation.  The federal government will also guarantee loans between banks to help create more liquidity.  This is turn should free up money to allow businesses to continue to borrow, help home purchasers secure loans, and inject credit where needed in our economy.  This action won’t create a quick fix, but should help keep the financial sector stable as we plow our way through a recession in coming months and hopefully help keep it from becoming a deep recession. 

Last week in the stock market was a lesson in fear.  This week things don’t seem so bad since the market was up over 900 points on Monday, a one day record unmatched in this century or the last.  Today was pretty non-eventful.  So what does the stock market have to do with real estate?  The stock market drop since the high in October, 2007 has caused the evaporation of trillions of dollars in assets.  Starting in 2006, home equity that homeowners thought would be there for them to borrow against evaporated as well.  Both are long term investments, but we seem to have forgotten that.  The go go market of the past decade in both the stock market and real estate was the only market some people knew.  So people acted as if their homes were bank accounts.  They are finding out very painfully that they weren’t.

 Some lenders and credit card companies took advantage of the “we want it now” mentality that has permeated our culture during this time.  Credit was easy; way too easy to get.  Without financial discipline and boundaries on spending, a lot of people got into trouble.  That’s the other side of the financial equation: greed.  Unfortunately when it comes to money, the two controlling emotions are fear and greed.  What’s the answer?  For some people, the next few years will not be pleasant as they try to dig out from under foreclosure and possibly bankruptcy.  If they are not careful, the mindset that got them there in the first place will put them back there again.  Unbelievably, the credit card companies still will give bankrupt consumers credit cards so “they can create a credit history again”.  Of course, in the meantime, the consumer gets to pay very high interest rates and the credit card companies continue to make a profit.  Everyone else is left holding the bag as the federal government tries to fix all the mistakes made by congress, companies, and consumers alike. 

Although it may not be sexy and showy, being a responsible consumer and working from a spending plan is the fastest way to creating wealth and homeownership that is manageable.  It’s a proven statistic that homeowners create a lot of wealth for themselves (when they do it right) that renters will never see because they are paying their landlord’s mortgage, not their own.  Yes, doing it right is really boring and consumers may have to wait to buy their first home until they have a down payment, stellar FICO scores, and steady income.  They may have to buy a used car instead of a new one.  Their first home may be 20 years old and not as big as they like.  But if people take a measured approach to purchasing the largest asset they will most likely ever have, they will have fun in the process and be comfortable with the outcome instead of living in fear that they may lose that asset.

Have you ever heard the term house poor?  Don’t let your house own you.  Be able to live in your own home and still have money for stuff for the house and for doing the things you enjoy.  If you are unsure how to get there, take a trip to the local library and check out some books on buying homes.  Not the get rich quick flipping houses books, but the realistic books showing you how to take planned steps to homeownership.  Also look for classes in your community that help you understand the process.  The resources are there.  All you have to do is look for them.  And look for professionals to help you.  A reputable realtor and lender are your first line of defense.  Get referrals from people who had a great experience buying.  Buying a house should be a lot of fun and this is an excellent market for the buyer who is prepared to do it right.  Fantastic opportunities are everywhere.  Make sure you have planned well to be able to take advantage of the opportunities before taking that step.

Is the bailout going to work?  Right now we are on a slippery slope.  As long as foreclosures keep happening, prices will be affected in the neighborhoods where they occur.  Tightened credit will help keep bad loans from being made in the future, but what about those people in trouble now, or who don’t know they are in trouble yet because they don’t know how rate adjustments will affect them?  There may not be immediate help in the bailout bill signed by congress and the president, but the Help for Homeowners program is now in effect and should help hundreds of thousands of homeowners who owe more than their home is worth.  Once the assets purchased by the federal government are valued we should see improvement in the financial sector, but it’s not going to be a quick fix.  For anyone anticipating trouble keeping up with their mortgage, now is a good time to talk to their lender about options available to them.

If you are interested in new construction and don’t know where to find what’s available in the Pikes Peak Region, try readynewhomes.com.  This site shows you what’s available now and what’s available in future months.  When you are ready to work with a builder on inventory homes or having them build you a home, send me an email to learn how I can help you get the best deal!

If you want to hear positive news about what’s happening for first time homebuyers, check out this recent information from CHFA, Colorado Housing and Finance Authority.  35% of CHFA buyers are buying foreclosures.  If you want to speak with an excellent lender to know more, send me an email today for contact information you can trust. Colorado CHFA website

If you would like to learn everything you need to know about buying your first home, come to the First Time Homebuyers class offered by Partners in Housing in conjunction with the Colorado Housing and Finance Authority. There is a small charge and you must pre-register with Partners in Housing, 473-8890. The class is offered the first Saturday of each month.

The next class is July 9, 2005, at 9am in the downstairs seminar room at Ent Federal Credit Union at 4545 Galley Road in Colorado Springs.  I will be teaching the real estate contracts portion that morning, so I hope you will join the class and prepare yourself before taking this big step.  There are a lot of things to consider if you are going to do it right and have your first home purchase be a stepping stone to financial wealth in your life.  Don’t miss this opportunity to get top quality, comprehensive information from experts in their field.  You will leave with your own workbook and sample documents.  The class ends at 2pm and covers the real estate purchase process and contract, brokerage relationships, the loan process and credit, plus homeowners insurance.  I hope to see you there.

If you are buying your first home, one of your first questions is “How much home can I afford?”. The best way to determine this is to speak with a competent lender who will work with you to buy now or help you position yourself to buy in the future. You will find links to lenders who can assist you in the LINKS section. There is no obligation to check them out. These are all lenders I know and trust to work with my clients. Right now the median home price in the Colorado Springs area is $195,000. This is an increase from a year ago when the median price was $182,850 according to PPAR statistics from April 2004 to April 2005. Interest rates are still staying low for the moment. If you would like to know what your payment would be on a specific home price, contact me and I would be glad to help you determine what homes in Colorado Springs would fit your desires and finances. After all, you still want to have money left over for fun too!!

I have helped many homebuyers and it would be my pleasure to help you as well.  We continue to add content to help answer your home buying questions so come back often and learn more.  To view homes in the Pikes Peak Region, click on Property Listings and you will find excellent search tools.  Try out the Map Search.  If you continue to click on a section of the map it will zoom into neighborhoods where you will get current information on all the homes available there.  You can also restrict your search to homes in that neighborhood in a certain price range, or with other features you desire.  Then CALL OR EMAIL ME and I would be pleased to meet with you and help you find that perfect home.

But don’t take my word for it.  My clients will share their experience with you:
I just wanted to drop you a line and tell you how pleased Dana and I are with our new home.  My biggest fear was picking a house or neighborhood that my wife wouldn’t like, but with your help I doubt I could have gone wrong.  I am very pleased with the deal we got.

Rob J.

Kathy Genz was a joy to work with!  She was especially attentive to our desires and worked hard to find us just the right house.  We were especially impressed with her attention to detail and timely completion of all matters.  We would highly recommend her as a skilled and personable real estate agent!

Gwen & Tyler D.

What we liked about working with Kathy is that she is an honest person.  And she was fun to be with.

Michael & Robin M.

During our search we found Kathy to be extremely knowledgeable in her field as our real estate agent.  Thanks to Kathy Genz we seem to have the exact property to fit our needs.  We highly recommend seeking out Kathy in the event you are in need of buying or selling a home.

Richard and Pauline S.

Thank you so much for all that you did to get us in our new home.  It is so wonderful to live out here in the peace, quiet, and beauty.  Thank you for joining us as we celebrated our new home.

The G. Family

The first time I spoke with Mrs. Genz I was immediately put at ease.  Kathy has an easy going manner while at the same time being highly professional and extremely knowledgeable.  Our family loves our new home and we are very grateful to Kathy for helping us through the process of making the purchase.

Adam H.