While I am sure that just about everybody will be glad to see the end of 2008, I always like to recap the year in Real Estate,  here is a list of the top stories that I felt help to shape the Real Estate world this past year:

• The Big Bailout: 2008 will definitely go down as the year of the bailout, The government intervened in the financial markets in 2008 with more than $700 billion in bailout money, the cash would be used to purchase mortgage-backed securities, which would free up cash for loans and prevent banks from closing their doors. Meanwhile, foreclosure notices rose, unemployment was the highest since 1994, and home owners were out on the street.
• Back to Basics in Financing: Gone were most of the 100% financing programs, no-doc loans. In their place, fixed-rate mortgages and FHA loans dominated the market. Grade-A borrowers who enjoyed FICO scores above 720 received preferential interest rates in 2008. Borrowers who did not want to pay a mortgage insurance premium saved for a down payment and took out 80% loans.
• Bank Failures: 25 banks were seized in 2008 by federal regulators, and included 2 of the 3 largest bank failures in U.S. history. IndyMac Bank was the third-biggest federally insured bank ever to be taken over by the government. Washington Mutual, the nation’s largest savings and loan, was seized by federal regulators, becoming the largest bank failure in U.S. history.
• Foreclosures: Through third-quarter of 2008, more than one out of every 100 households in the country had been foreclosed upon, bringing the number of foreclosures to more than 750,000. when fourth-quarter 2008 numbers are released, more than 1 million households in the country will have gone through foreclosure.
• Falling Home Values: Most people got in trouble with their mortgages as house values declined. In the third quarter of 2008, the S&P/Case-Shiller home-price index fell 17.4% from the same period in 2007. NAR also reported the median home sales price in the U.S. fell 9% in the third quarter of 2008 from same quarter in 2007.
• Job Losses in Real Estate and Related Sectors: Almost 100,000 Realtors bailed out of NAR as of third quarter 2008. The Bureau of Labor Statistics estimated 82,000 construction jobs were lost in November over October 2008, Estimated 60,000 jobs lost in the mortgage sector
• Loan Modifications not working: Banks said 187,000 mortgages nationwide were modified in the first half of 2008. The FDIC said it modified 5,000 loans since mid-November at IndyMac. A historic 6.99% of borrowers were behind on their payments in December 2008, said the Mortgage Bankers Association. As of October, 2008, the HOPE Now program sent out two million notices to homeowners and 17% of those borrowers called back to ask about modifying their loans. BUT>>>According to the Office of Thrift Supervision, more than half of the borrowers who negotiated a loan modification in 2008 fell behind in their payments within six months.
• The Return of the First Time Buyers: first-time home buyers were encouraged to buy in 2008 based on falling home prices and low interest rates which bumped up the affordability index. Some took advantage of the first time buyers tax credit First-time home buyers weren’t the only opportunity seekers in the 2008 market because they found themselves going head-to-head with investors over the rock-bottom prices

 

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