QE3 Creates Housing Opportunity

A few weeks ago when the QE3 decision came out, Ben Bernanke reaffirmed speculation that the Feds would continue to print money ad infinitum in an effort to “boost the economy.” While some people may prefer to see a more stable connection between the dollar and real value, meanwhile mortgage rates dipped. That means a housing opportunity is percolating… 

It seems almost impossible to imagine a 30 year fixed average at 3.4%, but well, there it is. As astonishing as that may be, the implications may also give you pause (or invite applause) depending on your plans over the next several years.

With interest rates this low, investors are almost forced to take some risks. Real estate is a go-to investment, especially when prices are low. After years of licking our wounds over the housing crisis, could ceaseless quantitative easing spell opportunity?

Banks that will be lending again will probably take measures to “over-qualify” their mortgagees in an effort to ensure solid loans. And while there are enough house buyers who meet these standards, the effect on the housing market is good.

The beneficial side effect? Many houses that were underwater will probably bob to the surface again. That’s great news to homeowners in general. If you can hang onto your house and have the means to make payments, I’d say “stay put!”

However, those who are facing foreclosures — and considering short sales or subject to’s to save the day– may be able to negotiate higher prices when they sell their houses. So now might be a good time to do that if you’re running out of time and getting late notices in the mail.

Either way, we could see a sweet spot for both buyers and sellers in the near term. Working together to increase housing and (it remains to be seen) the overall economy is merely icing on the cake. The real treat is that through real-estate, consumers on both sides of the transaction keep some control over their personal financial situation.

And that’s always a good thing. What do you think? I’d appreciate your comments on this subject.

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