If you are thinking of selling your home, inventory is extremely low in all areas I service. Good time to list and get the price your were hoping for. Move up Sellers, get the price you need to buy your next home.
“There’s no doubt that housing has been in the eye of the economic storm,” said Jim Gillespie, chief executive officer, Coldwell Banker Real Estate LLC. “However, our work with Dr. Ludwig underscores that Americans remain bullish on homeownership and have not forgotten the inherent, emotional reasons that make our homes precious to us – in tough times or not. People are simply and rightly being more mindful about what they need and what they can afford, and are more carefully considering when to become homeowners.”
The survey strongly indicates that people are re-evaluating their needs vs. wants when purchasing a home. Ninety (90) percent of U.S. adults agree that some people purchased more expensive homes than they should have before the recession. Meanwhile, 86 percent of Americans agreed that people are more closely evaluating how much home they can truly afford now, compared to before the recession
Written by: Tracey C. Velt
Something is amiss. CoreLogic®, which tracks virtually 90 percent of all mortgages and the circumstances of those houses, said that the shadow inventory is in its words: ”persistent” at 1.6 million homes that are delinquent or in some part of the foreclosure process – about 6 months supply. This doesn’t include the estimated 3 million properties that are on the market that are seriously delinquent, in foreclosure or in REO.
Where is the shadow inventory the largest? Combined, California, Florida, Illinois already represent about one third of all shadow inventory. If you add that of New York, Texas and New Jersey, you get to fifty percent. However, according to CoreLogic, “In some hard-hit markets, the demand for REO and distressed property is now over-stripping supply.” It’s not only REO and distressed, it’s all property.
Where? Arizona, and in particular Phoenix, a hard hit area that now appears to be an owner-occupied buyer’s nightmare. According to Andrew Waite, publisher of personal Real Estate Investor Magazine, there isn’t a lot of inventory to buy, and when there is inventory, it is being snatched out of the hands of people who want to live in these homes by investors with cash – even when the cash price is lower than the price that will require a mortgage. Mortgages are hard to come by these days; evidently, cash is not.
The issue with paltry inventory is not limited to the distressed states. The heretofore pattern of buy-sell-trade up has been shut down by tougher lending standards making it really difficult for first time buyers to get loans to buy their first property. This, of course, makes it challenging for the move up buyers who would sell to these first time buyers move on up. In addition, sellers unwilling to sell at today’s very low prices limit both housing supply and impede the important move up buyer market.
With all the distressed housing and all the plans to help people who have been displaced, caused to be underwater, etc., it’s an unexpected thing that in so many places you are hearing the refrain: “Where’s the inventory?”
by Tracy Velt
In 1981, English punk rock band The Clash wrote “Should I Stay or Should I Go?” about the rocky personal relationships between members of the band when facing the dilemma of sticking together or breaking up. The lyrics could not be more appropriate for homeowners buried in a mountain of negative equity and wondering what to do. After all “if I go there will be trouble and if I stay it would be double.”
The first step in answering this question is to find out if you qualify for a modification or if you can refinance using the HARP program to take advantage of today’s low interest rates. The process of getting a modification can be very frustrating. It’s “always tease, tease, tease, you’re happy when I am on my knees.” It not only takes a while to get approved, you must keep in mind that the lender does not have a legal obligation to offer or approve a loan modification. It is important to note that they may dual track your file, which means that while they are considering the modification they are moving forward with the foreclosure. Sometimes they “set you free” and foreclose in the middle of your modification application.
Let’s say you get a modification. I have a friend who was approved for what at first appeared to me to be an unbelievable loan modification. The modification did not lower the principle but did lower the interest rate to just 2 percent and locked that in for 30 years! This reduced their payment to the same amount that they would pay to rent a similar property. As such, it certainly seemed reasonable to stay – they get to keep their credit intact and remain owners, while paying no more than they would in rent anyway. Plus the payment remains fixed for 30 years, while rents would increase. But that analysis is incomplete. The question that remains is their status when they might want or need to sell, and when do they break even given the substantial negative equity that would remain?
Life events like divorce, death, job loss, job transfer, and others happen. Also sometimes folks just want to relocate. Based on our analysis, and assuming long-term home price appreciation rates, these folks would need to stay until 2026 to simply BREAK EVEN vs. paying rent. Worse, unless they use the rent savings to pay down principal, they’ll be stuck upside down in the property, and unable to sell without bank approval of a short sale until 2033. So whether or not it is a good deal for them depends a lot on how long they plan to stay.
For my friends, the best financial decision appears to be to try to short sell their current home, or if necessary let the bank foreclose. If they then rent for 3-5 years they should be able to qualify again to buy. Assuming interest rates don’t skyrocket, or some other major change doesn’t occur, this will save them over $100,000, and give them the flexibility to move if needed without being stuck in their current prison of debt until 2033.
Unfortunately, few homeowners facing this decision have the financial skills to really analyze the various scenarios, and few will consult a qualified accountant or other professional to do it for them.
This analysis is different for every homeowner facing this question. How far under water they are, and the terms of the loan modification are clearly important. It also requires some assumptions about price appreciation, rent inflation, and future interest rates. And importantly, it requires some serious thought as to how long they plan to stay, and perhaps some soul searching on the moral implications of walking away.
Bottom line, this question can be answered only by the homeowner based on their current situation and what is best for them. Would you stay or would you go now?
If you are one that is on the fence and thinking about should I or shouldn’t I??? My answer to you is “Yes”. Now is the time. The two main reasons in my opinion is: Banks are becoming more sensitive to the home owners needs of getting rid of the home and secondly agents are out there selling more of the short sale homes due to the banks becoming more cooperative and a better track record of a successful closing. Another reason why more short sales are being sold in TODAY’S market is due to the lower inventory of REO’s (foreclosed homes).
It is understandable to have reservations about letting the world know that you owe more on your home than it is worth. However, according to recent estimates, more than one out of eight homeowners in the U.S. is in the same situation. You are to be congratulated for admitting you need help, taking action, and finding a professional who can work with you toward a solution.
With recent estimates showing 40-60% of U.S. sales will be short sales or foreclosures, you are not alone. *
For more information on your options, call us today at 925-998-5902 or 209-836-0896. Discover the truth about the short sale myths. Visit our site again soon for more information.
Myth #3 – There is Not Enough Time to Negotiate a Short Sale Before My Foreclosure
This is a myth that probably hurts homeowners the most. Many do not realize that foreclosure is a process, and that there is time to make decisions that may result in better outcomes.
The foreclosing party—in most cases a lender—can stall a foreclosure up to the final day of the process. Today, many lenders will stall a foreclosure with as little as a phone call from you explaining that you are trying to sell, and almost all lenders will stall a foreclosure with a legitimate contract. For real estate professionals who understand foreclosures and short sales, there is time available until the foreclosure process is complete. *
For more information on your options, call us today at 925-998-5902 or 209-836-0896. Discover the truth about the short sale myths. Visit this site tomorrow for more information.
Myth #2 – You Must Be Behind on Your Mortgage to Negotiate a Short Sale
While this may have previously been the case, today lenders are looking for verifiable hardship, monthly cash flow shortfall, or pending shortfall and insolvency.
If you meet these three requirements and believe that you soon may be unable to afford your mortgage, act immediately. Any delay could limit your options. Do not wait until the countdown clock to foreclosure has started and you have even less time left. *
For more information on your options, call us today at 925-998-5902 or 209-836-0896. Discover the truth about the short sale myths. Visit this site tomorrow for for information.
As the housing crisis continues, several myths have developed concerning short sales. It is important to understand that a short sale can be an excellent solution for a homeowner stuck in a stressful, no-way-out situation. Learn your options and don’t become another statistic….
Myth #1 – The Bank Would Rather Foreclose than Bother with a Short Sale
This is one of the most common misconceptions. The reality is that banks do not want to foreclose on your property because the foreclosure process is incredibly costly. Banks, investors, and even the federal government have all publicly stated that if a person is qualified for a short sale, the deal needs to be considered. Overwhelmingly, banks receive more on their investment through a short sale than a foreclosure.
The qualifications for a short sale include:
Financial Hardship – There is a situation causing you to have trouble affording your mortgage.
Monthly Income Shortfall – “You have more month than money.” A lender will want to see that you cannot afford, or soon will not be able to afford your mortgage.
Insolvency – The lender will want to see that you do not have significant liquid assets that would allow you to pay down your mortgage.*
If you or someone you know are facing this situation, call today to get a free, confidential consultation. Karen Ross 925-998-5902, Clare LeForce 209-814-0800.
Tune into tomorrow for myth #2…..
Are you stressed about the late notices that the bank has been sending? Worried about foreclosuring on your home? Here are a few ways to avoid foreclosure….
* Reinstatement: bring the loan current
* Forebearance: Temporary repayment plan
* Refinance: New loan with reduction in monthly payments
* Loan Modification: Modify original loan terms
* Sell the Property: Must make loan current
* Rent the Property: Must make loan current
* Short Sale: Negotiate with bank to accept sale under loan amount
* Deed In Lieu of Foreclosure: Friendly foreclosure
* Bankruptcy: Will stall foreclosure but not prevent it
You have options. Call us today to get the confidential, caring help that you deserve. Learning about your options will allow you to make an informed decision and reduce the stress. Utilize our CDPE (Certified Distressed Property Experts) staff to negotiate with your lender. Call today and don’t let time run out. Clare LeForce 209-836-0896 / Karen Ross 925-513-2702.