Grab a Copy Of This Sunday's New York Times to Read an Article About the Economy, Mortgages, and Housing by Financial Expert, Roger Lowenstein

This morning on National Public Radio, Steve Inskeep interviewed Roger Lowenstein about the economy and the housing market. Roger Lowenstein, the author of The Origins of The Crash: The Great Bubble, a book about the Wall Street crash of the 1990's, has written an article which will be in Sunday's New York Times magazine about the housing market. In today's interview, he brought up some interesting points about the history of mortgages in this country. According to Mr. Lowenstein, in the 1950's local banks gave people mortgages. Investment accounts earned 3% and bankers used this money to provide 6% mortgages. People dealt with the local bank as, obviously, today's myriad of lending institutions did not exist.

In the 1970's Wall Street got into the mortgage lending act and created new securities from mortgage money, which were then sold to investors. Bankers would get paid to originate the loan and then would sell the loan to investors. Local mortgages were no longer the only source for money. All kinds of options for lending were created. Through the 80's and 90's, more "new style" loan programs were created. These new loan packages contributed to the problems we are seeing today.

I am sure Mr. Lowenstein's article will be an interesting and informative read. I will add my thoughts to this blog after I read his article.

However, it is important to remember there is both a national and a local economy. Our local economy is still amongst the strongest in the country and will continue to be so because of our strong job market.

Two Seattle Times articles, an article from the 30th and the headline story in today's paper, report Washington State led the nation with the most number of cities, 5, in the top 20 cities for appreciation so far this year. Prices in Wenatchee were up 23.54% , Longview saw a 13.6% increase, and the Seattle/Bellevue/Everett area experienced a 9.89% increase. Appreciation in the state as a whole ranked third in the nation with 9.12% growth.

It is clear the increase in appreciation happened earlier this year, however, economist Stanley Duobinis states the key to Washington states's economy, "It always comes down to the local economy. Washington's has been an above average performer because of the monster companies there, and their business is pretty solid."

His other comment, "A lot of growth restrictions are basically driving up the price of land, and therefore changing the nature of the house you can build on the land and causing prices to rise quite rapidly," echoes remarks I made in earlier posts this year. The two issues, the great economy and growth management issues will continue to help our real estate market over the long haul.

Please let me know if you have any comments about this article or after you read The New York Times this weekend.