Here we go again.
Tuesday, September 23rd, 2008 | Investment, Money, Real Estate, The Economy | No Comments
As Congress sits around throwing accusations, people are being hurt. The only thing that I see that could be worse is that Congress does something about the economy. I was watching our Phoenix market begin the turn around. Sales were increasing, inventories were beginning to decline and BOOM! The rug gets pulled out from the buyer’s plans with the dramatic changes in seller participation.
The lower priced properties are the most important sector of the housing market. Putting people in properties with monthly payments at or below rent payments is a winning program. The average rent in Phoenix is over $800 per month. Moving into a $100,000 home makes both social and economical sense. But NO! These folks must have at least $3,500 additional money sitting in the bank for 90 days or borrowing only from family members. Remember, there are significant costs involved with moving in.
This change is only putting a band-aid where there is no cut. The band-aid is cutting off economic blood flow to the real estate market body. Of course Congress could do much more to really trash the economy. There were four significant economic downturns between 1890 – 1929. The downturns rebounded quickly and the country was stronger. In the early 1930s, Congress did the opposite of what should have been done, And the whole world felt the pain. We could still be in that depression if we hadn’t put our men to work on the battlefield. War is definitely the worst way to manage economic down turns.
Let’s put the seller and other assistance programs back in our real estate market.
The short sale is anything but short!
Wednesday, September 17th, 2008 | Money, Real Estate, The Economy | No Comments
The news is reporting home values have declined by 27%. This number changes from month to month, but regardless of the percentage, in almost every neighborhood, Home values are below the high spike of 2006. For you who expect to live in your homes for at least five more years, this housing price fluctuation has very little to do with your life. For those who want to purchase a home, it is almost like after Christmas shopping. Unfortunately many folks who must sell their homes are SOL. Many of these folks have mortgages that are higher than the present value of the home. One way out while avoiding foreclosure is a “Short-Sale’”
I have really been discouraged with the short sale process. (Selling a home below the mortgage value) It seems like lenders are unwilling to do what is necessary to get a sale done. Many banks seem to think it a privilege to buy their vacant home and expect a buyer to wait for months for a decision. I can’t remember any of my real estate associates ever describing an easy short sale. Many short sales take months to complete with special bank generated forms and endless attempts to contact a decision maker. It is not uncommon for me to send 5 copies of personal information in a purchase contract to a bank fax or email before the banks admit they received one contract. What are these folks doing with all this personal information? And after doing 5 – 10 times the work of a normal sale, the bank expects me to cut my commissions.
The people hurt the most are never considered during all this ineptitude. A seller is not considered. Now everyone seems to think the seller just shouldn’t have purchased the property. The bankers are the real experts. They have whole departments with educated staff to evaluation properties on a professional level. The seller, it seems to me, trusted the lender to some extent. Now, he is upside down, looking at having to carry FORECLOSURE on his record. I would have expected that the lender and seller would try to partnership to minimize the loss to both. Unfortunately, it appears that redundant processes and understaffed departments slow the sale process which creates more loss for everyone.
While a file is gathering dust on a desk, the home owner’s life becomes uncertain. Some of these folks live in this home and don’t know when they can leave. Some are investors (considered a dirty word by the politically correct) who are watching their entire life savings dwindle away with an upside down situation.
The buyers are no better off. Imagine if you are trying to purchase your first home. You have a lease that ends in 45 days. What are you supposed to do? Sit on the street with all your posession until someone finally decides to look at your offer?
Only a banker, a government bureaucrat, or someone in Congress could design a system this bad!
2 million troubled borrowers avoid foreclosure
Friday, August 29th, 2008 | Money, Real Estate, The Economy | No Comments
Phil found another interesting article at CNN Money.com
The Hope Now coalition reports that it completed a record number of mortgage workouts in July – but that was outpaced by the increasing rate of foreclosures.By Les Christie, CNNMoney.com staff writer
Last Updated: August 27, 2008: 2:40 PM EDT.My Intro
NEW YORK (CNNMoney.com) — Hope Now has helped more than 2 million at-risk borrowers stay in their homes during the past 13 months, according to numbers released by the coalition on Wednesday. The alliance of mortgage servicers, counselors, and investors assembled to combat foreclosures fixed more than 192,000 problem loans during July, a one-month record that represents a 6% increase over June.
http://money.cnn.com/2008/08/26/real_estate/Hope_now_hits_two_million/index.htm?postversion=2008082714
Kids Teach Us So Much!
Friday, June 20th, 2008 | Money, Real Estate | No Comments
A couple of weeks ago my son-in-law went out of town and my daughter was scheduled to work odd hours at her job at Starbucks.
It was a real treat, if not a very tiring event, to have our granddaughter stay with us for a couple of days. Like so many young children, she was always thinking up new games. It amazed us as at just how creative she was. She never seemed to run short of new ideas and had the energy to back them up.
The longer she stayed with us the more often we would here her say “I want my Mommy.” Then “I want my Daddy.” And finally she started saying “I want to go home!” At first I was a little taken aback! Although, my daughter has a nice home, mine is a little bigger with grass in the back yard and a park across the street. Eventually I understood that this was her way of life she missed and wanted it back. Her Mommy , her Daddy, her toys and her bed were there. It didn’t matter if she was in a bigger, better or newer place to live, she wanted “Home!”
Much of the housing problems we are just starting to overcome were caused by our wanting bigger and better and not necessarily “Our Home!”
One really great thing about Kathryn’s visit is that I got lots of really great HUGS. There is something really special about a young child’s hug.
Some Buy a New Home to Bail on the Old
Thursday, June 12th, 2008 | Money, Real Estate, The Economy | No Comments
Phil send me this aarticle with the note that this has got to stop and I agree whole heartedly. The price of homes changes with the market. This is very short sighted!
Fannie Plans Rules To Avoid Practice Described as Fraud
By NICK TIMIRAOS
June 11, 2008; Page A3
Next month, Michelle Augustine plans to walk away from her four-bedroom house in a Sacramento, Calif., subdivision and let the property fall into foreclosure. But before doing so, she hopes to lock in the purchase of another home nearby.
Home from Work Program
Monday, June 2nd, 2008 | Money, Real Estate | No Comments
I attended a real estate class a few weeks ago. I was so impressed with this new program that I am flying to Texas later this month to become an instructor. Let me preface this by saying that the majority of people I speak with have significant misinformation on current down payment requirements, available programs, how to avoid foreclosure, and even the important benefits of home ownership.
The class was an introduction to an exciting program called “Home from Work.” HUD (U.S. Department of Housing and Urban Development) originally developed the program and the NAR (National Association of Realtors) has partnered with HUD to get the information to employers. It is an outreach program to bring current accurate information into the work place. Three huge issues are addressed.
* First time homebuyers – programs, advantages, the process, credit, qualifying, etc.
* Foreclosure and financial services designed to help with hardship situations.
* Employer involvement to the extent an employer will see benefit and assist their employees.
The program can be brought directly to the employees in the form of a workshop with one-on-one counseling to follow up.
It looks to be a great program that brings together non-profit organizations, Realtors®, employers and employees. A real win – win – win – win situation.
Banks miss an easy housing fix
Monday, June 2nd, 2008 | Money, Real Estate | No Comments
Lenders say they want to help troubled homeowners, but they are delaying deals that could save everyone – including the lenders themselves – a lot of time and money.
By Les Christie, CNNMoney.com staff writer
Last Updated: May 28, 2008: 11:16 AM EDT
Lenders foot the bill for abandoned homes
Housing rescue on the rise; so are foreclosures
Banks miss an easy housing fix
Home sales rise – still near 17-year low
NEW YORK (CNNMoney.com) — Banks say they want to help troubled homeowners, but they are delaying deals that could save everyone – including the lenders themselves – a lot of time and money.
http://money.cnn.com/2008/05/28/real_estate/short_sales_long_waits/index.htm?postversion=2008052811
Homes are biggest bargain since 2004
Wednesday, May 28th, 2008 | Investment, Money, Real Estate | No Comments
Falling prices opened up home buying for many more Americans.
By Les Christie, CNNMoney.com staff writer
NEW YORK (CNNMoney.com) — With prices crashing around the nation, home price affordability has improved dramatically in many U.S. cities.
As a result, 53.8% of all new and existing homes sold nationwide during the first three months of 2008 were affordable to families earning the median household income of $61,500, according to the latest Housing Opportunity Index released Tuesday by Wells Fargo and the National Association of Home Builders (NAHB).More .
Here is a great place for great financial information
Friday, May 16th, 2008 | Investment, Money, Real Estate, Safety, Statistics, The Economy | No Comments
If you have read some of my earlier posts you probably asked yourself where do I get some of the data I use. As an example, the statistics in the article “Why haven’t your mutual funds made you rich.” I found on the net. I gave Crestmont their credit and even linked their web site on this post.
I was back there again today and was amazed at some of the great stuff these folks have compiled. Using their information and by adding in costs and inflation, I came up with the realization that the money I put in mutual funds in 1997 has generated NO wealth for me in more than ten years!
I admit that some of the information at their site is a little deep. But they have some great graphs that help a lot. One place I looked today was the volatility of the market and another great chart was “Interest rates and inflation.” Now that was an eye opener!
Most of us think we are so busy that we don’t have time to do any research. We don’t pay any real attention to our IRA or 401k. We think that the professionals are doing a better job than we can. We just glance at the numbers when we get in our quarterly report. Most of us don’t know where to start even if we were interested. That is one of the reasons I have this blog. If I find something I want to share it.
While you are watching “Dancing with the stars,” go to Crestmont – http://www.crestmontresearch.com/ and have a look around during the commercials. As an older person I want to make sure I put my money where it is safe and work HARD for ME!
Cheryl moved her retirement funds into cash last November. She is just getting back into mutual funds and missed a 25% drop in the value of her nest egg. The real estate market has some exciting places where I can meet and exceed my financial needs. I feel this is the most exciting time to invest in the last 30 years. “Buy low sell high!”
Home-price data has its flaws
Thursday, May 8th, 2008 | Money, Real Estate, Statistics, The Economy | No Comments
Phil found another gem of an article on the news you hear and see every day!
Top officials with the National Association of Realtors and Standard & Poor’s, which issues the S&P/Case-Shiller Home Price Index, agreed this week their monthly reports are giving imprecise readings of price changes at all levels — national, state and regional — due to rare market conditions that are skewing survey results.
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