Orlando Developer Expects Another Housing Bubble?
Downtown Orlando developer Cameron Kuhn, who built a portfolio worth more than $100 million said Thursday he expects another bubble before the market stalls and falls again. Speaking to a group of small business operators and owners in a panel discussion Kuhn said this week’s rate cut by the Federal Reserve by half a percentage point will probably help reinflate home sales and prices in the short term. “You will have another residential bubble,” Kuhn predicted, noting that the nation’s central bank is planning on injecting more capital and liquidity into the market to prevent a possible recession, a downturn some economists fear might be sparked by the slowdown in the housing markets nationwide. “There is no way to offload the current housing inventory,” Kuhn said of additional homes and condos that will be built and sold as a result of an easing of lending and credit restrictions. I strongly disagree with Mr. Kuhn. Please, Mr. Kuhn, explain to me how the recent rate cut will increase home values and reinflate home sales in the short term? The rate cut does not directly affect mortgage rates, however, it will reflect lower rates for homes equity lines of credit and second mortgages which are tied to the prime rate. The mortgage rates have actually increased by a quarter of a point since the Fed’s cut this week! What were you thinking Mr. Kuhn or maybe the question is were you thinking when you made those irrational statements? Now, regarding the statement claiming the existing and new inventory of homes will be sold off as a result of easing of lending and credit restrictions however that is not the case in the current lending environment. Fannie Mae and Freddie Mac the nation’s foremost purchaser of mortgages has STOPPED buying loans over the amount of $417,000 which is considered jumbo status, therefore, requiring the originating lender to portfolio their loans. Does this sound like the easing credit restrictions, certainly not Mr. Kuhn. So, Mr. Kuhn, tell me when this next bubble will begin to form? I can’t wait to hear your response to this question! With over a record 26,000 exiting homes for sale in the Orlando region and challenging lending, the environment doesn’t expect another housing bubble anytime soon….and you can bet on that!