From David Petrovich at Active Rain comes a story on "The Perfect Storm..." :
There looms a perfect storm on the horizon, a storm that will highlight the need for realty professionals to fully understand the construct of successful preforeclosure short sale transactions.
scheduled expoding ARM resets (subprime 80/20s, ARMs, interest only, etc.)
the increase in minimum monthly credit card payments, and not so
coincidentally, changes in bankruptcy law, and
a correcting/deteriorating real estate market
Now that the real estate market has cooled, and mortgage lenders are tightening up lending criteria, fewer delinquent borrowers will have the needed equity to refinance their loan, or to sell their home to avoid forecloure.
What is a Short Sale?Just about everyone investigating the various methods or techniques of speculative real estate investment have heard or read about preforeclosure short sales.
They've heard or read about ‘short sale secrets' which purportedly unlock the door to mortgage lenders' huge giveaways resulting in the monitization of previously unrealized profits and untold riches.....
So what is this thing called a short sale?
Hold on a second! I have been told by realtors (Active Rain is a realtors website) that its a great time to buy? Why would I buy when there is a perfect storm coming? Wouldn't that imply that I should wait until the storm is over? The NAR has a $40 million ad campaign begging people to buy a home right now and yet their own members think its a perfect storm?
14 comments:
Hold on a second! I have been told by realtors (Active Rain is a realtors website) that its a great time to buy? Why would I buy when there is a perfect storm coming? Wouldn't that imply that I should wait until the storm is over? The NAR has a $40 million ad campaign begging people to buy a home right now and yet their own members think its a perfect storm?
Don't you know, it's not about YOU. If people don't buy, THEY don't make money; so it's not good for THEM if YOU don't buy.
They are doing what all aspiring salesmen do; it's perfectly natural. Can you blame them?
Propaganda is everywhere and we will be attacked by alot of it in our newspapers/radio/tv/billboards due to the N.A.R.s campaign. It will just be survival of the 'smartest'; anyone who listens to them will be darwinized!
...and there will be some that will because instead of listening to the news and researching the market like they should be doing, they are too busy sitting on their asses watching reality shows on tv and seeing on a commercial break "now is a great time to buy a home"; they will then say, "honey look, it is a good time to buy a home now, let's start looking tomorrow ok?", "yes dear, prices have come down a little, I'll get in touch with an agent tomorrow".
Yes, unfortunately that is the mentality of alot of people in America; it's very sad, but very true.
LIBubble said... "...and there will be some that will because instead of listening to the news and researching the market like they should be doing, they are too busy sitting on their asses watching reality shows on tv and seeing on a commercial break "now is a great time to buy a home"; they will then say, "honey look, it is a good time to buy a home now, let's start looking tomorrow ok?", "yes dear, prices have come down a little, I'll get in touch with an agent tomorrow".
Very true, but after talking to the lender...monthly sticker shock sets in. Damm babe, $5000.00 a month to buy, we can't affort that. But there will always be fools to be had.
seqsWhen are the realtors just going to get back to showing houses instead of making market predictions . If I was a realtors I would just say that I can't make market predictions
well, i am a realtor, and no i cannot predict the future, but i have been in it long enough to know that you cannot predict that it will continue to plummet either. so, in truth, can anyone say for certain it is a "good" or "bad" time to buy or sell? the fact is that a home is a place to hang your hat, something to call your own. if by some influence direct or indirect a house appreciates or depreciates should not be the concern... ever. keep your monthly mortgage payment at 30% or below, preferably below, your total debt at 45% or below and all should end well. as for those who will say adjustable rate mortgages were forced upon the masses, the fact is that adjustable rate mortgages were offered to those who wanted more than they could afford. i have had several clients get adjustable rate mortgages and are currently fine, those who could have been the "statistic" i worked closely with and helped them get into a better rate when it was necessary because there jobs inevitably increased their means. i know all Realtors do not do this , but then again not everyone performs their job the same. bottom line if you do not feel comfortable to buy, do not buy. i tell my clients all the time to not buy right now or sell right now, the fact is people will because there is something to be said for owning something. as for the posts on this blog, everyone seems to be out to get Realtors "realtwhore" and mortgage brokers "scum bait" i believe has been coined several times in various posts. isn't that a hasty generalization to assume that all Realtors and all mortgage brokers are scum? is that to say you meet one teacher that puts in minimal time and effort into their work makes "all" teachers lazy and ineffective. i do not know, it seems to me that you all are trying to educate people on what you think they should do, and yet are you really educating them or patronizing them. if the market stabilizes, which i do not think that it will, but i do not think that it will be blown past lows of 130-150 per square foot either. there is no reason for it to depreciate that much, we can sustain an average square foot of 130-150. truthfully instead of complaining about home prices or the market, why do we not take a look at alternatives to getting people into homes. sorry for the rant, just that no one is for sure what is going to happen. the best we all can do is educate not patronize people.
anon 6:52,
Yes I can say with certainty it is a terrible time to buy right now. Most of the homes listed are staying on the market and are not selling. Why, because prices are so far out of whack the average Joe can’t afford the monthly payment. It amazes me how your industry tries to talk up the Bakersfield economy. The median income here is next to nothing. The average oilfield worker for example earns around 3K a month and that’s considered a decent income here. Take a 300K starter home at 6% fixed at 30yrs, with 20% down and that is roughly $1750.00 per month. Explain to me how someone with the average Bakersfield income can make this payment and still pay for their utilities, gasoline, food, water, garbage and other things like cloths entertainment, car repair ect. God forbid if they don’t have 20% down, the PMI kicks in then and the payment kicks up to around $2300.00 a month. Take the first time homebuyer out of the market and soon there will be no buyers. The buyers set the price and at the moment the market is stale, so what does that tell you? You mention how to get people into homes, lower the price!
obviously you did not read my entire post at length. if you take 130-150 per square foot X 1500 sq ft the cost would be around 195,000.00 - 225,000.00, which is about 4-6% annual appreciation from 1999 to 2007. i sold homes in 1999 for about 80-105 per square foot, keeping in-line with an average level of appreciation puts us in that category of 128-150 per square foot. i never said that i thought that the "anomaly" that has become Bakersfield was going to sustain itself, never did i say that. i did not say that the economy was good either, you cannot build a county's economy on the food industry, which is the only industry we have added other than builders by selling our farm land. furthermore, i agree if you do not have first time home buyers you do not have a market, but instead of being angry at Realtors take a look at the government and furthermore small and big business owners to be angry with. there are so many things they could deal to help out the economy, from raising wages, offering incentives to employees, etc., etc. as far as prices go, truly the real thing that affects the market is consumer, a willing buyer and willing seller have to come together in order for property to be sold. and please, i do not make generalization towards people that post on this blog, so try and refrain from using generalizations about Realtors and mortgage brokers. you see, you will not affect my business, why, because i treat my clients right and i never tell them to do anything, all i do is consult. if i am asked at this particular point in time if they should by a home, my general answer is no, but after some deeper understanding of where they are and what they need sometimes the answer is yes.
also, you all say you want a stable market, it actually takes a willing buyer and willing seller under no form of duress, (foreclosure, job layoff, etc., etc,) to make a stable market. what is posted here will not make a stable market. so do you want a stable market or do you want people to get hurt by a huge down turn, or do you want prices to come down, what is it exactly do you want?
sorry, i continue to read your post and want to respond, not that this helps the monthly situation for most people but as of 2007 your PMI is tax deductable. there are guidelines of course, but it will help with some people. i also agree that the cost of living is out of control, but is it really a realtor or mortgage brokers fault, or the consumers that participated in this last 4 years of ridiculous appreciation. i know, with certainty, that i never have helped someone get a home they did not want, if i did or circumstances changed i sold it free of charge. remember that realtors are the vehicle, not the driver.
I’m speaking of the here and now, not what was in 1999 or anytime other. You are pointing the finger at the goverment solely for this housing mess and that is a generalization on your part, but on the other hand you take a no fault stance on your part or your industry’s play in this nationwide fiasco. I SAID: “It amazes me how your industry tries to talk up the Bakersfield economy.” Is that a direct hit on your post on this blog? Pointing fingers seems to be the name of the game now, that proverbial shit has hit the fan. Let me tell you who I think the bubble was cause by: Alan Greenspan for lowering the overnight rate to 1% Realtors pushing their “buy now or be price out forever..miss the boat blah blah crap”. Mortgage lenders for making the deal work at any cost, exotic loans, false appraisals ect. If you were and are the lone honest real estate agent how is it you make your living in this market. It sounds to me like you may feel a little guilt, that’s about it. Feast or Famine right? What are the business’s suppose to do in Bakersfield, and how and why? Is it their fault and responsibility to raise wages, so the big machine keeps turning. The PMI year end tax break or small write off is nothing compared to the monthly increase in payment the consumer is burdened with that Your PMI write-off sounds more familiar with the realtor pump up the market talk.
yes, please let us not think positive. obviously you cannot read as you say, i plead that i, while not perfect, never and i mean never harmed anyone of my clients. and as for your rant, it must a sad lonely exsistence to always view the glass as half empty.
cheers and keep up the good fight.
Honest Realtor,
Tell it to the poor suckers you've $crewed over the last 5 yrs.
130-150 per square foot X 1500 sq ft the cost would be around 195,000.00 - 225,000.00, which is about 4-6% annual appreciation from 1999 to 2007. i sold homes in 1999 for about 80-105 per square foot, keeping in-line with an average level of appreciation puts us in that category of 128-150 per square foot.
If the windows in your stats were any wider they would fit every imaginable aspect. Narrowing your stats would make them more useful, but less impressive.
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