Despite the tightening or disappearance of certain loan programs, many lenders are responding to our current buyer’s market, increased market times and increased inventory by developing programs to help current homeowners get into their next home while allowing for the possibility that their current home might not be sold by that date. For example, the latest program I’ve seen is through American Chartered Bank and is called the Skip Pay Mortgage. This program allows qualified borrowers to actually skip up to 6 months worth of mortgage payments. For current homeowners who are waiting for homes to sell while market times stretch past 120 days, 6 months worth of skipped payments might be exactly what these move-up buyers could use.

 Not being shackled with dual mortgage payments is a big concern for many sellers with homes on the market. The only difficulty is that many sellers are not willing to consider an offer with a home sale contingency. Basically a home sale contingency is a type of offer that states that the buyers are allowed time to sell their current home. If they are unable to sell it, they are not penalized or forced to buy the home under the terms of the contract. Because of the extreme market times we’re experiencing, many sellers aren’t even willing to consider a home sale contingency offer. This means that for current homeowners that find their “dream home” they’re often forced to take their chances and try to sell their home before their dream home goes under contract with another buyer or possible get into a dual mortgage situation. This program and others like it sounds like they’d allow these type of move-up bueyrs to purchase a home without a home sale contingency while still allowing for the sale of their current home over a period of 6 months.

May is officially over, the numbers are on the books and the news is in: we’re still solidly in a down market. REALTORS across the Fox Valley are reporting rather depressing figures for May - lots of listings but few sales. Further, the word on the street from the builders is that new construction sales are still languishing. One builder was quoted as saying, “this is the worst market since the 1980’s” - a somewhat suprising comparison when you compare today’s low 6% interest rates to the 12-16% in the 1980’s. Here’s the contradiction - there were more sales in May 2007 than there have been since last July, however, the amount of inventory (unsold homes) on the market has soared to nearly a 2-year high (only topped by the inventory in April 2007). Homes are being sold, but the market is so flooded with inventory right now that we’re not seeing much reduction and prices continue to drift lower as sellers are forced to chase the market downwards.

After an early start to the “good season” in February, we seemed to hit a lull between late March and now. It’s hard to predict what the next few months will be - we’re treading on somewhat unknown ground. However, we can expect inventory to remain high as new homes continue to enter the market. If an influx of buyers hit the market running after Memorial Day, we could see some reduction and homes could start moving, but we’re still waiting for signs of that. June should be a telling month. It could be the difference between the light at the end of the tunnel and one of the slowest markets we’ve seen in a decade.