With the Fed no longer spending the tens of billions of dollars monthly on mortgage securities, we will only have the private sector to fill in the gap. When that happens, we can naturally expect mortgage rates to rise. “The difference in monthly mortgage payments of 5% or 6% can be measured in tens of thousands of dollars over the life of a loan,” one writer explains.

The Atlantic Monthly writes that the credit markets need securitization, and warns that it will only become more difficult to borrow money (and those loans will come at higher interest rates) as the Fed program ends. “If you think banks aren’t lending enough now, then you’d find a world with no securitization much worse. Yet, that might be what you get if the Fed ends its program.”

Why would the Fed remove such a successful program? The analogy of a bike with training wheels is often given – if you want an economy to strengthen, recover and stand on its own, at some point you need to take the wheels off. If the Fed keeps rates too low for too long, inflation will rise higher and you will expect to see rates rise anyway. Home loan rates will increase as demand is met, naturally, with or without the Fed.

We can expect the end of the first quarter of 2010 to be a telling time for the economy’s recovery, but the heavy favor of the buyer and borrower is going to change. These will be some of the last months we’ll see that are such great markets for buying a home or land. If you are considering buying, you should begin your search now.

Hickory Creek Ranch

According to the Wall Street Journal’s article (Green Acres is the Place to Be, 12/2), many new buyers are looking at rural land who weren’t before.

The reasons vary, but the result is definite: rural areas are growing in popularity. One of the most common motivations for buying rural land deals with the pocketbook: in the uncertain economy, land is standing out as a great investment. Many, expecially young singles, have been squirreling away savings, and are starting to look at something that they feel is going to be a more solid investment and a safer, surer bet than the stock market or even a 401(k).  Land is a great asset, and even small plots have appeal to these “starter” groups. It’s “a hedge against an unpredictable future,” the Journal says. Also, the rural market is often stronger than the residential market, and so more rural land can be a great deal over real estate closer to, or in, a city. It’s proving to be a good option whether or not you plan to live on the land.

Hill Country Hideaway

Another group of people looking at farms and ranches are people with more of a “back to their roots” mentality - interested in getting away from the rat race and pace of the city, and to a daily routine involving farming and ranching. This is a wide range of people with everyone from young families looking to get their kids involved, to empty-nesters and retirees who have spent entire careers in an urban environment. They enjoy making money, self sustaining, living green, or just having the fun of this lifestyle as a complete change of pace from what they were used to. “It’s a little like the pioneer spirit,” says one editor, “they still want high-speed Internet but want to feel like they are doing something else for their families.”

Cow Creek Ranch

Some are looking for a way to get away from the city while still being close enough to work, and others may have been forced away from work and are looking to the next opportunity. For many, living on a Texas ranch is something they’ve “always wanted to do.” But for whatever reason, now seems to be the time that so many are feeling the motivation to give ranch life a try.

Dave Murray is your expert in central Texas ranch properties, as well as waterfront, luxury and development. Serving all your real estate needs from first time buyers to relocation, his team is the #1 Team in the #1 Colwell Banker Texas office, and top 10 of all Realtors in the greater Austin area.

Sandy Ranch

CNN Money’s article “What Housing Bust?” covers what areas of the nation have done well in the housing market, and why. According to writer Les Christie, areas with plenty of available developable land have smaller swings between home price highs and lows. This is because, when the demand for housing spikes, home builders are able to build more homes and keep the housing prices in check. Speed is also of the essence here, home builders need to be able to build quickly, thus, the need for available land.

“Elasticity of supply,” this is called, according to Mark Fleming, chief economist for First American CoreLogic. And Christie says, it is the definition of Texas real estate, and similar throughout all the metro areas.

“Texas is the poster child for these ‘steady Eddie’ states. House prices during the past three years rose in all 26 metro areas with gains ranging from 2.8% for Dallas, the second largest metro area, to 9.7% in Houston, the largest, to a whopping 32.5% in Odessa.”

This is part of what is causing the metro areas in Texas, including Austin, to grow so rapidly. Landowners in the Austin area should continue to see their investments in high demand for buyers and developers.