Real Estate Market Bulletin Blog

A number of conflicting reports suggest that while the housing market recovery has yet to start, we are closer to the end of the carnage than the beginning.

Recent stats:

1. The Massachusetts Housing Partnership reported that a potential 65,000 or more homes could add to the state’s inventory of unsold homes due to pending foreclosures, or homes likely to be foreclosed on even after mortgage modifications.  This possible 2nd foreclosure wave would add as many homes to the market as are typically sold in a given year, suggesting further price depression.
2. At the same time, the Fed’s March 3 Beige Book reports slow but steady strengthening of the economy, including stabilizing employment and rising wages, all of which will help reduce the chance of future foreclosures as those who still have their homes and jobs will be in a position to keep both.
3. Ultimately, home prices are the best gauge of market health.  Those prices have been stopped declining in most parts of the US and are starting to rise in some, according to the Case Shiller index. See S&P PDF file with the current national home price rate of change.

The real estate market of today is an amalgamation of foreclosures, bank owned homes, and distressed sellers.  These circumstances have lead to unbelievable deals financially for those willing to make a quick decision and a commitment.  The market as it is now is inefficient and lacking order.  People who are buying are often seeking bargains meaning they’ll either pounce on the first and best deal they see out there, or they’re willing to wait a few months before swooping in for the purchase in a short sale process.  And still others prefer to take part in a chaotic bidding war for a bank-owned house being auctioned.  This leaves little room for the traditional, more relaxed methods of buying a house.  Buying houses on a whim is not everyone’s style however. 

There are several aspects artificially limiting the supply of residential property and at least temporarily bringing the housing market back to a more orderly, less chaotic fashion.  Some of these aspects include:

– Borrowers filing lawsuits and bankruptcies

 

Perhaps in response to these aspects, and perhaps not there has been a slowing of declining home prices and an increase in sales recently.  On top of that, interest rates on 30-year fixed loans remain extremely low.  And although unemployment is still increasing, median income appears to remain unchanged across the nation.

Overall, it is expected that market value of homes will continue to decline, but at a slower pace.  For the foreseeable future, the markets will be mixed, troubled and unpredictable.  In other words, don’t expect the current status quo to go away anytime soon.

Homeowners
Housing Market
Real Estate News

About half of all homes sold last month were sold to first-time homeowners that however has not made up for an overall sub-par spring selling season.  The median price for a house in the month of March was $175,200, down 12% from the previous year.  Typically house prices rise in the Spring season however as was expected, prices are historically low in comparison with previous years.  The good news is that house prices are up 4% from February especially in the western states, the region of the US most effected by foreclosures and the economic slump.

Leading this surge in first-time homeowners purchasing houses this spring may be a new initiative for first-time home buyers where upon purchase they can receive an $8,000 tax credit.  Hopefully this recent surge in first-time home owners will last through the summer, boosting some much needed action and money into the housing market.

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Homeowners
Housing Market
Real Estate News

Amidst the current recession hitting the United States few are finding financial opportunity, those who are however are finding it in the real estate sector. A surprising phenomenon has been happening in the past 6 - 12 months, Chinese investors have been investing heavily in the sub-par American real estate market. “The real estate prices in America have gone down drastically,” said Yin Guohua, a partner in a law firm who recently returned from an 11-day U.S. tour with a group of Chinese elite. “It’s a good option for Chinese people who want to buy for investment.”
Chinese real estate tours within the United States are on the rise and many are hoping that the Chinese investment in US real estate will aid the otherwise stagnant and failing real estate market. The thought being any money flowing into the real estate market no matter where it comes from is ultimately good and will hopefully spark others to re-gain their confidence.

Housing Market
Real Estate Investment
Real Estate News

Not since the Great Depression have prices for commercial properties and homes dropped so much.  Falling house prices have been the source of much consternation in the past several months for homeowners, speculators, and the economy in general.  However the new low prices have found a market, especially in regards to distressed properties.  As of recently co-op and condo sales have actually began to rise and its estimated that roughly half of these have been from distressed properites (ie. Foreclosures).

     Although the overall housing market isn’t expected to take a turn for the better until at the best next year, investors who can come up with long term sources of money are purchasing the properties and often renting them out.  Companies such as Angel Acquisition Corp. purchases, renovates and then sells distressed residential properties are banking on the prospect that the real estate market has reachest the lowest it will go and are hoping for a recovery in the housing market soon to reap great profits.

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Economic Indicators 
Housing Market
Real Estate Investment

     With more and more American homeowners facing foreclosure everyday (although that figure may be declining) many homeowners are turning to an alternative source of credit in an effort to save their homes.  A reverse mortgage, although it’s been around for quite some time has been gaining in popularity in the past several months due to a variety of factors. 

     Traditional mortgages can be tricky for retirees to attain however reverse mortgages generally don’t take into account information such as income or credit history instead taking into account factors such as the home’s value, applicant’s age and any existing mortgages.  These elements have accounted for a roughly 6.4% increase in the number of reverse mortgages in the past year helping many especially older aged Americans avoid bankruptcy and payment delinquencies.

     Reverse mortgages don’t come without drawbacks though, they often have higher fees and total costs can average between $7,000 and $20,000 adding a considerable amount to the loan.  These fees can include a pricey origination fee and typically an upfront insurance premium equal to 2% of the home’s value.

    Ultimately a reverse mortgage could be a solution to your foreclosure problem, however experts and analysts agree it’s best to look at other methods including refinancing, 2nd mortgages, etc. before jumping into a reverse mortgage.

Read More Here…

 

Foreclosures
Mortgages
Credit Crisis

Massachusetts ranked third among US states for the greatest decline in foreclosures in February as compared to February, 2008, according to a Smart Money article today (See Bright Spots on the Foreclosure Front).

However if you are still looking for bargains, they can and will be had for some time.  Locate foreclosed homes for sale in Massachusetts at http://www.foreclosurelistingtoday.com/

Foreclosures
Real Estate Market
Massachusetts Foreclosures