Blogging From The Desk of Alicia Lagarde Craig
1. Homes have never been more affordable.
Do you realize that today people are buying houses at the same prices they were ten years ago? It's like having a time machine: you get to go back and buy at yesterday's prices today. One of the advantages of buying at the lower end of the market is that in a few years it will appreciate more than homes that are more expensive. Homes that now cost $100,000 are likely to appreciate to between $130,000 and $150,000, while homes starting at the $500,000 won't reach $650,000-$700,000 in the same time frame. That's because there is less demand the higher you go. Demand drives price increases and, as the market improves, demand for lower price points will go up faster than at the higher end.
2. Mortgage rates are at rock bottom and won't stay there forever.
The national average on a 30-year fixed-rate mortgage dropped to 4.36% in August 2010 - lower than it's been in the past half century. Once rates start going up again, they can go up fast - creating a major impact on monthly finances. Do you know that if your interest goes up 1%, your monthly payment will go up 10%? What's more likely? Home values dropping 10% or interest rates going up 1%?
3. Lenders are back in the game!
The final quarter of 2009's financial meltdown led to a sense that financing had dried up, but mortgage funds are alive and available. The majority of banks make money by making loans - they simply have to get back in the game. Most people don't know that it is still possible to get a loan with as little as 0-3% down where your credit score isn't the only determining factor.
4. Prices are trending back up
Every major price index points to a housing market that has hit bottom and is moving in a positive direction. After thirty months of declining values, home prices appear to be stable or appreciating in nearly every U.S. market. Locally, in the New Orleans Uptown market, prices are trending back up and sellers are beginning to see the shift from a buyer's market to a seller's market, meaning that sellers are not willing to make the concessions that they use to make in the past and they are also starting to see competing offers from different buyers on their homes.
5. Sellers are motivated!
When speaking of the New Orleans Metropolitan Area (i.e. Lakeview/Lakefront, Metairie, Mid-City, The Northshore), Supply now exceeds demand and buyers have the upper hand. This means lots of choices, lots of negotiating power and smart sellers fiercely competing by offering great prices and excellent conditions.
6. Ownership costs are dropping below rental costs!
The recent downturn in the housing market resulted in a drop in rental rates, but rents are back on the rise while the cost of home ownership has dropped.
Did you know that everyone is buying real estate, just not necessarily for themselves? If you are renting, you are buying real estate for your landlord. Wouldn't you rather be buying it for yourself?
7. Home ownership remains at the core of the American Dream
A recent Fannie Mae study reveals that the majority of Americans still aspire to own a home.
-Owning a home is critical to financial stability and wealth building.
-A home serves as a forced savings account and provides a solid asset, as well as a place to live.
-Despite the recent market upheaval, the vast majority of Americans still consider home ownership to be important to the economy and preferable to renting.
-Since the end of World War II, promoting home ownership has been high on the list of the federal government's priorities, and will continue to be so.
If you need assistance in real estate, contact Alicia Lagarde Craig or Jeff Craig @ 504.352.6190 or 504.382.3724.
References: KW Seize the Market Action Book
Showing posts with label Fannie Mae. Show all posts
Showing posts with label Fannie Mae. Show all posts
Wednesday, February 1, 2012
Monday, August 11, 2008
Slowing Foreclosures May Mask Woes
Blogging From The Desk of Alicia Lagarde-Craig
When the research firm RealtyTrac Inc. releases its latest foreclosure report Thursday, don't be surprised if the number of filings declines again.
Dusan Petricic
Last month, RealtyTrac reported that foreclosure filings totaled 252,363 in June, down 3% from the previous month. Some analysts are expecting the July data to show another decline or very little change.
If that happens, could the improvement be a sign that the foreclosure problem is ebbing? Probably not. The data may reflect several developments aimed at reducing foreclosures, including new state and municipal laws that put a temporary moratorium on foreclosures. Such laws are designed to give homeowners more time to work with their lenders and modify troubled loans. Some cynics say the laws are designed to give the appearance that the housing crisis is easing ahead of the November elections.
Whatever the reason for the laws, they are starting to kick in. A new state law in California requires lenders to wait an additional 30 days after a homeowner misses the first payment before filing a default notice and use more "due diligence" to attempt a loan modification. The law took effect July 8.
In Massachusetts, homeowners now have a three-months grace period after they default on their mortgage before the lender can file to foreclose. The Massachusetts law is credited with an 84% drop in foreclosure petitions -- the first step in the foreclosure process -- filled statewide in June from a year earlier, according to the Warren Group, a Boston-based research firm.
"The 90-day cure period will lead to more dialogue between borrowers and lenders and increase the prospect that loans can be modified," says Dan Crane, Massachusetts's undersecretary of Consumer Affairs and Business Regulation.
Several other states are following, including New York which passed a bill last week that requires lenders to send a preforeclosure notice to certain borrowers at least 90 days before foreclosure proceedings may be initiated.
Mortgage companies and lenders on their own are also showing more patience with borrowers who fall behind. Mortgage giant Fannie Mae, for example, said it will increase fees it pays loan-servicing companies, which collect payments, for "workouts" that prevent foreclosures. Freddie Mac also said it will give servicers more time to pursue workouts.
Critics, however, say the new laws are only delaying inevitable foreclosures and may signal a false bottom in the housing market.
"It's all smoke and mirrors," says Vincent Valvo, group publisher at the Warren Group. "People are going to trumpet this and say foreclosures are going down. But three months from now it will surge right back up."
When the research firm RealtyTrac Inc. releases its latest foreclosure report Thursday, don't be surprised if the number of filings declines again.
Dusan Petricic
Last month, RealtyTrac reported that foreclosure filings totaled 252,363 in June, down 3% from the previous month. Some analysts are expecting the July data to show another decline or very little change.
If that happens, could the improvement be a sign that the foreclosure problem is ebbing? Probably not. The data may reflect several developments aimed at reducing foreclosures, including new state and municipal laws that put a temporary moratorium on foreclosures. Such laws are designed to give homeowners more time to work with their lenders and modify troubled loans. Some cynics say the laws are designed to give the appearance that the housing crisis is easing ahead of the November elections.
Whatever the reason for the laws, they are starting to kick in. A new state law in California requires lenders to wait an additional 30 days after a homeowner misses the first payment before filing a default notice and use more "due diligence" to attempt a loan modification. The law took effect July 8.
In Massachusetts, homeowners now have a three-months grace period after they default on their mortgage before the lender can file to foreclose. The Massachusetts law is credited with an 84% drop in foreclosure petitions -- the first step in the foreclosure process -- filled statewide in June from a year earlier, according to the Warren Group, a Boston-based research firm.
"The 90-day cure period will lead to more dialogue between borrowers and lenders and increase the prospect that loans can be modified," says Dan Crane, Massachusetts's undersecretary of Consumer Affairs and Business Regulation.
Several other states are following, including New York which passed a bill last week that requires lenders to send a preforeclosure notice to certain borrowers at least 90 days before foreclosure proceedings may be initiated.
Mortgage companies and lenders on their own are also showing more patience with borrowers who fall behind. Mortgage giant Fannie Mae, for example, said it will increase fees it pays loan-servicing companies, which collect payments, for "workouts" that prevent foreclosures. Freddie Mac also said it will give servicers more time to pursue workouts.
Critics, however, say the new laws are only delaying inevitable foreclosures and may signal a false bottom in the housing market.
"It's all smoke and mirrors," says Vincent Valvo, group publisher at the Warren Group. "People are going to trumpet this and say foreclosures are going down. But three months from now it will surge right back up."
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