With all the back and forth in the Economy, the Stock Market, the Unemployment numbers, one may ask themselves, "is now the time to buy"? Really?
Well aside from my inherent bias as a Realtor, my answer is an emphatic YES.
Why?
I've been renting houses now for nearly two years. After dozens and dozens of rentals I have noticed a single common factor in the properties I rent. The mortgage to buy it would be LOWER than the current market rent!
This may seem astonishing and even counter-intuitive at first, but even in premium locations like Coral Gables, Coconut Grove and the like, most rental prices are higher than a standard mortgage.
Couple this with the still historical lows in mortgage rates (still hovering around 4%) and the locked in interest ceiling by the FED until 2013, and I have to say emphatically YES to my rhetorical question above.
There are some caveats however.
For one you'll need better than average credit. Right now banks aren't really looking at borrowers under a 680, although some will still do a 620 or above.
Also the document process is long, and arduous. After the mortgage mess underwriters have become EXTREMELY gun shy and check and double check everything but your blood type before issuing the coveted "clear to close".
Third, expect delays. Where it used to take 30-45 days to close a deal, now 60-90 days is the norm while underwriters "take their time" crossing and dotting everything. (Thank you Dodd-Frank).
Finally, unless you qualify for FHA making your down-payment a paltry 3.5%, expect 10-20% down. You'll need cash. Also on Nov 18th FHA loan limits were changed, but this won't affect most buyers.
But even with these "limitations" my answer is still a resounding YES.
Now IS the time to buy.
Wednesday, December 7, 2011
Monday, December 5, 2011
THIS IS A RANT. YBW
I've written on the subject of communication in the past and my frustrations with its absence in the Real Estate world. But after this week, I think there needs to be a new rule. If you take longer than a day to respond to a communication, you get penalized somehow.
First the mandatory rhetorical question. In today's technology driven business world, with Smartphones, Blackberry's, Laptops, etc, how difficult is it to respond to text messages, emails and phone calls in a timely manner? How long should one have to wait before they are entitled to a little upset?
I ask these questions because it is still routine in my business to have to wait days for a response to an offer, an inquiry, or a request to show a property.
And when you represent a buyer or renter, time is definitely of the essence, and sometimes a few hours makes all the difference in the world.
If you agree that Realtors should respond to their communications within an hour or two of receiving them, (death and hospitalization of course still acceptable excuses) then please pass this blog post along to everyone you know.
Maybe if enough internal group pressure exists amongst other Real Estate professionals, the lazy ones will get the message.
First the mandatory rhetorical question. In today's technology driven business world, with Smartphones, Blackberry's, Laptops, etc, how difficult is it to respond to text messages, emails and phone calls in a timely manner? How long should one have to wait before they are entitled to a little upset?
I ask these questions because it is still routine in my business to have to wait days for a response to an offer, an inquiry, or a request to show a property.
And when you represent a buyer or renter, time is definitely of the essence, and sometimes a few hours makes all the difference in the world.
If you agree that Realtors should respond to their communications within an hour or two of receiving them, (death and hospitalization of course still acceptable excuses) then please pass this blog post along to everyone you know.
Maybe if enough internal group pressure exists amongst other Real Estate professionals, the lazy ones will get the message.
Wednesday, March 30, 2011
How the CRA Fueled the Housing Bubble
Here is a great article that further delineates in great detail the conclusions I drew in my last blog post. Enjoy!
How the CRA Fueled the Housing Bubble
How the CRA Fueled the Housing Bubble
Wednesday, March 23, 2011
How the Federal Gov't is Ruining the Housing Industry
Today the Commerce Department came out with their New Housing Sales numbers for January.
The article sites "a lack of demand because buyers don't have access to credit" as a result of unemployment.
Obviously if you don't have a job you can't get a loan, but not having access to credit isn't a result of unemployment it’s a result of over-regulation.
There are still plenty of buyers in the marketplace. The real problem is that by and large Banks simply aren't making loans. And for the loans they are making, the process has become so difficult, so mired in red tape and frankly, fear, that many have simply left the marketplace altogether (both consumers and Real Estate and Mortgage professionals; I have personally observed this for 2 years now. It’s truly maddening to try and get a deal done these days). And no amount of “bail out” money is going to loosen the credit strings. Not with the monstrosity known as the Dodd-Frank Wall Street Reform Act stifling the entire industry.
The Gov't regulations rammed through by the Pelosi/Reid Congress and signed by President Obama, have had the affect of bringing the Real Estate and Mortgage Business to a virtual standstill. In their attempt to "regulate" the "reasons" for the financial crisis, they have not only NOT solved the real problem, but in fact made things worse. Like all Big Gov't intervention, they have attempted to solve a problem they created, by mis-assigning its cause and then targeting that wrong cause with further regulation.
What am I talking about ? Well...The crash was not initially caused by Wall Street and the Junk Securities they were selling as AAA investments, but by the Gov't itself, meddling in the housing and mortgage markets in the first place. Specifically the CRA and Barney Frank!
Granted CMO/CDO bundlers and traders, Moody's, Fitch and Standards and Poors are all culpable and I am certainly not excusing the fraud and collusion that existed in rating mortgage backed securities, backed by sub-prime JUNK paper, as AAA (a crime by the way that no-one has yet to be held accountable for). But that wasn't the earlier beginning of the problem. It started with the notion that Banks MUST make loans to people who can't afford them. An Unequivocal overreach of Gov't regulation and violation of the very fundamentals of a free market, all in the name of “social justice” (the idea that owning a home is a “right” instead of a privilege).
If the Real Estate and Mortgage Markets were truly run by Free Market principals none of this would have ever happened. Why? Because the free market would never have allowed such high credit risk borrowers if not forced to!
If the free market wanted (wants) sub-prime loan products, and there is a market for them, then the free market will create and regulate them. If some Banks want to take the risk, and that risk is honestly and accurately rated, then the market itself (in this case the secondary mortgage market), will value them (and their risk), buy them, and voila, we have a market.
But that’s not what happened. The Gov’t regulations (mentioned above) forced Banks to create loan products for borrowers they knew couldn’t qualify in the private free market industry of risk to reward (profit) actuaries. And once created there needed to be somewhere to put this paper.
Wall Street, in an attempt to solve the problem of what to do with this junk, bundled and sold these as securities with FALSE risk assessments. Frankly I’m not sure they could have done anything else. Again I don’t condone what happened but I ask the question “What were the Banks supposed to do once they were forced to write this paper”?. They needed an exit strategy. They wouldn’t hold such paper on their own accord, its risk was too high. Clearly Wall Street had a problem. What to do with this junk. The real Fraud here isn't that they bundled and sold these loans but the fraudulent risk assessments placed on these securities in the first place. Perhaps that too was an unavoidable expedient. But whether you come down against Wall Street Traders or the Rating Agencies, it is clear to me that it is Gov’t overreaching regulations based on abstract ideology that CAUSED the problem.
So what do they do? Pass more regulation of course. The very person that helped create the regulations sparking the crisis in the first place has now co-sponsored and helped push through an even more overreaching law, targeting the WRONG WHY's further destroying the Housing Market.
Here's a clue Barney...LOOK IN THE MIRROR, and RESIGN. PLEASE......
The article sites "a lack of demand because buyers don't have access to credit" as a result of unemployment.
Obviously if you don't have a job you can't get a loan, but not having access to credit isn't a result of unemployment it’s a result of over-regulation.
There are still plenty of buyers in the marketplace. The real problem is that by and large Banks simply aren't making loans. And for the loans they are making, the process has become so difficult, so mired in red tape and frankly, fear, that many have simply left the marketplace altogether (both consumers and Real Estate and Mortgage professionals; I have personally observed this for 2 years now. It’s truly maddening to try and get a deal done these days). And no amount of “bail out” money is going to loosen the credit strings. Not with the monstrosity known as the Dodd-Frank Wall Street Reform Act stifling the entire industry.
The Gov't regulations rammed through by the Pelosi/Reid Congress and signed by President Obama, have had the affect of bringing the Real Estate and Mortgage Business to a virtual standstill. In their attempt to "regulate" the "reasons" for the financial crisis, they have not only NOT solved the real problem, but in fact made things worse. Like all Big Gov't intervention, they have attempted to solve a problem they created, by mis-assigning its cause and then targeting that wrong cause with further regulation.
What am I talking about ? Well...The crash was not initially caused by Wall Street and the Junk Securities they were selling as AAA investments, but by the Gov't itself, meddling in the housing and mortgage markets in the first place. Specifically the CRA and Barney Frank!
Granted CMO/CDO bundlers and traders, Moody's, Fitch and Standards and Poors are all culpable and I am certainly not excusing the fraud and collusion that existed in rating mortgage backed securities, backed by sub-prime JUNK paper, as AAA (a crime by the way that no-one has yet to be held accountable for). But that wasn't the earlier beginning of the problem. It started with the notion that Banks MUST make loans to people who can't afford them. An Unequivocal overreach of Gov't regulation and violation of the very fundamentals of a free market, all in the name of “social justice” (the idea that owning a home is a “right” instead of a privilege).
If the Real Estate and Mortgage Markets were truly run by Free Market principals none of this would have ever happened. Why? Because the free market would never have allowed such high credit risk borrowers if not forced to!
If the free market wanted (wants) sub-prime loan products, and there is a market for them, then the free market will create and regulate them. If some Banks want to take the risk, and that risk is honestly and accurately rated, then the market itself (in this case the secondary mortgage market), will value them (and their risk), buy them, and voila, we have a market.
But that’s not what happened. The Gov’t regulations (mentioned above) forced Banks to create loan products for borrowers they knew couldn’t qualify in the private free market industry of risk to reward (profit) actuaries. And once created there needed to be somewhere to put this paper.
Wall Street, in an attempt to solve the problem of what to do with this junk, bundled and sold these as securities with FALSE risk assessments. Frankly I’m not sure they could have done anything else. Again I don’t condone what happened but I ask the question “What were the Banks supposed to do once they were forced to write this paper”?. They needed an exit strategy. They wouldn’t hold such paper on their own accord, its risk was too high. Clearly Wall Street had a problem. What to do with this junk. The real Fraud here isn't that they bundled and sold these loans but the fraudulent risk assessments placed on these securities in the first place. Perhaps that too was an unavoidable expedient. But whether you come down against Wall Street Traders or the Rating Agencies, it is clear to me that it is Gov’t overreaching regulations based on abstract ideology that CAUSED the problem.
So what do they do? Pass more regulation of course. The very person that helped create the regulations sparking the crisis in the first place has now co-sponsored and helped push through an even more overreaching law, targeting the WRONG WHY's further destroying the Housing Market.
Here's a clue Barney...LOOK IN THE MIRROR, and RESIGN. PLEASE......
Tuesday, January 25, 2011
New Year's Resolutions
It's that time again when we take stock in where we've been and where we are going.
Last year was the best since 2006 for me and to be honest I am grateful.
I spent most of the year renting homes in my backyard.
Sales are still slow and even though I have 20 homes under contract, they are all but 1 short sales and the banks in this country are still reeling.
Some are starting to streamline their processes and getting some semblance of order in their loss mitigation departments.
Others are still wearing a blindfold and stumbling in the dark.
The key (and a very hard lesson to learn for a Type A personality) is PATIENCE.
I hope you had a great 2010. And I wish you a 2011 of prosperity.
My Resolutions Are:
1. Stay on Purpose.
2. Remember it isn't personal
3. Even the worst, most obstructive person you have to deal with is still a person. treat them with some dignity.
4. Have fun, life isn't that serious :)
5. Above all, flourish and prosper.
Last year was the best since 2006 for me and to be honest I am grateful.
I spent most of the year renting homes in my backyard.
Sales are still slow and even though I have 20 homes under contract, they are all but 1 short sales and the banks in this country are still reeling.
Some are starting to streamline their processes and getting some semblance of order in their loss mitigation departments.
Others are still wearing a blindfold and stumbling in the dark.
The key (and a very hard lesson to learn for a Type A personality) is PATIENCE.
I hope you had a great 2010. And I wish you a 2011 of prosperity.
My Resolutions Are:
1. Stay on Purpose.
2. Remember it isn't personal
3. Even the worst, most obstructive person you have to deal with is still a person. treat them with some dignity.
4. Have fun, life isn't that serious :)
5. Above all, flourish and prosper.
Subscribe to:
Posts (Atom)