Finance Issues

         I have been researching and am interested in real estate, finances, and brokerage so I researched current events that are influencing and impacting these markets and professions. The real estate market has undergone significant ups and downs throughout the past decade and are continuing to have an impact on the market. In 2007 Congress passed the Mortgage Forgiveness Debt Relief Act that saved failed mortages of homeowners a huge tax break that would otherwise force them to pay thousands to the IRS (CNN).  At the end of this year this Act will expire and if Congress does not issue an extension this shall have major consequences for homeowners and the real estate market as a whole. Only recently the real estate market has improved and there has been stability in both maintaining ownership. If this does not get re-passed then this could mean another collapse of the real estate market resulting in foreclosures and the loss of homes (CNN). This could be potentially devastating. The only positive news is that not everyone would be affected and a lot of real estate owners are protected.  Currently the market in San Francisco is stable and is pretty evenly a buyer and sellers market.  The price trend is holding steady and there is lower inflation of prices than in previous years (RealityTimes).

            Financial markets have taken a slight hit after the reelection of President Obama. Wall street has seen losses in the stock trade and all of the major stocks, DOW, S&P 500,  and Nasdaq have all been down (BUZZ). This is a normal trend after presidential elections and nothing to lose sleep over. The market also has taken a hit due to Hurricane Sandy and the financial costs and aid that is being sent to New Jersey (BUZZ). Hurricanes and natural disasters can have a huge impact on local economies which in turn can have an impact on the nations’ economy if not taken care of in ample time. It is important to help rebuild infrastructure and the community devastated by the natural disasters so that the economy is not put on a hold, jobs can be created instead of lost, and the community can return stronger than it did before. Investments have slowed down yet again due to companies’ uncertainty of the outcome of the presidential election, so the companies withheld, and the market closed for two days for the hurricane. This led to investors pulling 1.8 billion dollars from the market (BUZZ). Only a small blip but one that was significant enough to be noticed. In other investment news 401k’s have hit record high numbers as Americans are pouring more into their savings than ever. This is a great sign and important for a healthy economy (Money). It’s a great way to plan ahead and avoids in a influx of loans should people face financial hardship. They will have something stashed away. Companies are also contributing highly into 401k’s as well.

            In the mortgage market things are proving to be steady and things are on the rise. Fannie Mae and Freddie Mac have both been increasing revenue with a recent profit of 2.9 billion in the 3^rd quarter (MortgageNews). This was nothing impressive, however they did not have to borrow more money from the Treasury. The biggest thing happening in the market right now is the push to get rid of excess inventory or properties in the market. This includes vacant homes and foreclosures.  Things are expected to continue to improve over the next couple of years (MortgageNews). This also helps get rid of weak investors and realtors that were having negative impacts on the market with high foreclosures and low return rates. This will help to ensure that the right investments are made and the people borrowing are able to maintain their payments. Other exciting news included Freddie Mac’s reduction of the refinance rate by 1.7% was the highest in history. Great news for homeowners to reduce what they owe and get better rates on loans (MortgageNews).