It is my opinion that given the prices of New York City residential real estate, this takeover will have more psychological than direct economic impact on our market. That said, it will most certainly have a more direct effect on some Manhattan owners as evidenced by the following question from Robert H and answer from our own mortgage specialist, Dan Shlufman:
Q. I read the following story on CNN today and I was wondering if I could get your opinion? CNN states that the "bailout of mortgage giants should result in lower mortgage costs and make credit more available. But lending standards will stay tight and risky borrowers will still pay extra fees."
A. It is impossible to know what the rates will be on 30 year fixed rate loans in the future. It is likely that the rates will go down since they are being kept artificially high at this moment due to a lack of liquidity in the bond markets (i.e. not enough activity). However, since so many factors other than Fannie/Freddie affect these things (e.g. inflation, world events, jobless claims, etc), it is irresponsible for CNN to report or any reputable analyst to predict a number for these loans.
Seems that more is to be revealed and no one is qualified to predict exactly what all of this will mean. Stay tuned…
