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Is the housing crisis over?

The Wall Street Journal published an interesting opinion article on May 6, 2008 titled “The Housing Crisis Is Over”. Here’s the link: http://online.wsj.com/article/SB121003604494869449.html

Although our business has seen a small upward tick in sales activity over the last four weeks, it’s hard to believe the crisis is over. (For those of you who don’t know, our company markets real estate investment opportunities to investors nationwide).

There are still a very large number of adjustable rate mortgages that were originated three years ago that are set to reset this year. These will likely increase the pace and number of foreclosures throughout 2008 and into early 2009, and those problems will extend into other areas of the mortgage industry. All of which will keep lending guidelines very tight this year.

It could be argued that the housing market is dragging along the bottom, but the fact of the matter is that lenders are still pulling back on their lending programs and that doesn’t help to sell houses in order to absorb existing inventory and help stimulate the housing market.

The large number of expert opinions and reports predict the national housing crisis to end somewhere between 2009 and 2011. What’s your opinion?

We are currently experiencing the worst real estate recession this country has seen in decades. Property prices in some areas have fallen to the point where many people are paying more on a mortgage than their property is actually worth! In fact housing prices dropped at the fastest rate ever in February indicating that the housing slump is probably gaining momentum. The Standard & Poor’s/Case-Shiller home price index of 20 major cities fell by 12.7% in February versus last year, the largest decline since its inception in 2001. Seventeen of the 20 metro areas reported record annual declines.

Many builders and developers around the country have gone bankrupt, even the large ones that recently appeared financially solid. There are hundreds of developments scattered around the United States that have been left unfinished. And there are thousands of new construction homes that are either in the process of construction or have never been occupied. Continue reading »

It can be scary to invest in anything during a recession. We all carry visions of the great depression and bread lines and people selling apples. The idea of putting your money into anything other than your mattress can be frightening for some. However, real estate should never be looked upon as an ordinary investment.

Real estate is one of the few investments that we actually use and need. Everyone needs a place to live and call home. And real estate has systematically and quantifiably proven to have risen in value over the decades. Continue reading »

With falling prices and rising inventories, investors are finding themselves in the best buying position in almost a decade.

A recent polls by Reuters/Zogby tells us that it’s a good time to buy. And another poll by Associated Press and AOL also reveals that it’s a good time to buy but 60% of those polled won’t buy any real estate within the next two years.

The disparity is probably due to economic fears which are causing consumers to tighten their purse strings. The Reuters/Zogby poll said that nearly 75% of American’s believe the economy is in a recession right now, and almost 50% rated their personal financial situation as negative.

The AP/AOL poll said that nearly 14% of mortgage holders fear they will miss a mortgage payment soon. And 30% said they are concerned their home’s value will decrease within the next two years.

The important thing to remember is that you should stay focused on your local neighborhood and those of your real estate investments. Remember that real estate is primarily driven by local economic factors such as jobs, housing inventory, and supply and demand.

Forbes recently released their list of the ten worst selling housing markets with very few surprises.  Topping the list was Miami, Florida where the glut of inventory continues to linger.

Of the 40 largest metropolitan markets analysed, not one market showed any sign of price appreciation.  With slow sales and dropping prices the aggressive investor may be able to pick off some very good deals in these markets.  Research, patience and a sharpened sense for value can land you a great investment.

Here are the ten worst markets according for Forbes: Continue reading »

Interestingly, the National Association of Realtors predicts a gradual recovery during the second half of 2008 as the mortgage situation improves.

I’m sure we would all love to see a recovery before the end of the year. But that remains to be seen given the current mortgage climate where more than 120 mortgage lenders have either filed bankruptcy or closed their doors all together.

We have seen home prices drop in most major markets with sales activity at its lowest level since at least the late 1980’s – around the same time the Savings and Loan Fraud Crisis hit its peak. Continue reading »