August 7 — For most people hoping to buy a home these days the “bad news that’s really good news” just got worse. What we mean by that is that the reeling real estate market, which is experiencing lower prices and increased inventories favorable for buyers, is also now under a credit siege. Dozens of mortgage companies have gone out of business so far and the market for even the highest quality mortgages is slowing to a standstill. There might be plenty of homes for sale, but if you need a mortgage you either might have trouble getting it, or you might have to pay more for your loan.
Enter the buyer of a retirement community or active adult development who is over 50. Many of these folks are well armed with cash as they get ready to retire. Because they don’t need to be credit qualified, they are being highly welcomed as home buyers. It’s been a bad real estate market for sellers lately, just got tighter for borrowing buyers, but things haven’t been this rosy for cash buyers in a long time. No one can say when the best time to buy a retirement home will be, but we can say this with some certainty – there is more inventory and lower prices right now than any time in the last two years.
The problem with the credit markets is now not just confined to the home financing sector. The New York Times today reported on the “virtual seizing of nearly the entire spectrum of the credit markets – from mortgage-related securities to high-yield bonds and even European corporate debt”.