Tampa Student Loan and Bankruptcy Lawyer Blog — January 14, 2020
Our law firm was front and center during the 2008 financial crisis, handling thousands of short sales, loan modifications, deeds in lieu of foreclosures. foreclosure defense and finally bankruptcy if helpful for our clients. Our law firm was front and center during the 2008 financial crisis, handling thousands of short sales, loan modifications, deeds in lieu of foreclosure, foreclosure defense and finally bankruptcy if helpful for our clients so it’s only natural that we’ll pick that back up if that’s the direction we’re headed.
Bankruptcies have been picking up of course – particularly for those who are unable to pay the bills or worried about getting further in debt.
But what about the housing market and what we can expect going forward? We are entering the Spring seasonal timeframe where new listings increase until a peak around May. We are entering the Spring seasonal timeframe where new listings increase until a peak around May.
According to an analysis by Fannie Mae, the U.S. housing market would, on paper, return to pre-pandemic 2016-2019 housing affordability levels if one of the following occurred:
If U.S incomes increased 60%, we’d return to pre-pandemic housing affordability levels.
- If U.S. home prices fell 38%, we’d return to pre-pandemic affordability.
- If mortgage rates fell 4.7 points (from 6.93% to 2.23%), we’d return to pre-pandemic affordability.
- Do we expect any of those three things to occur? We don’t expect any of those three things to happen. Housing affordability may be a bit closer if we combine a little bit of each. I’m not certain how much housing demand is really there, with headlines about insurance costs, non renewal and the LA fires. Rents have dropped dramatically and my family has considered renting instead of selling to reduce the risk. We didn’t actually flood during the hurricanes this year, but it was a close call. I haven’t been a renter since I was a young lawyer in the 1990s. For those with jobs, incomes have been rising, but expenses are increasing at a faster pace. Home prices have stabilized a bit, kind of similar to a company on a hiring freeze – not filling recently vacated positions.
Sustainability is key. It may be wise to use this time to put yourself in a better position to weather any storms. If you are in debt, try to reduce it or at least lower its carrying costs. This might mean filing for bankruptcy to restructure your finances. You might need to call your debt servicers and ask what options are available. Take their advice with caution, as they are not representing you, but your creditors. You need to be as informed as possible before making a decision. Please contact us if you would like to discuss your options.
