By: Dennis Norman
Four days ago on the Real Estate Consumers News blog I wrote a post stating I did not think low interest rates will prove to be long-term fix to the housing market and in fact nothing more than short-term “life support”. Today CNNMoney.Com published an article which stated “Unfortunately, the low interest rates have not spurred much of an increase in the number of new loans made to home buyers. According to the Mortgage Bankers Association, nearly 83% of all mortgage applications recorded last week were to refinance existing loans rather than to buy a home, indicating that low interest rates have so far failed to free up the frozen housing market.”
You need to keep this in mind when out there buying homes that appear to be good deals. Remember that Read more…
By: Dennis Norman
Four days ago I wrote a post stating I did not think low interest rates will prove to be long-term fix to the housing market and in fact nothing more than short-term “life support”. Today CNNMoney.Com published an article which stated “Unfortunately, the low interest rates have not spurred much of an increase in the number of new loans made to home buyers. According to the Mortgage Bankers Association, nearly 83% of all mortgage applications recorded last week were to refinance existing loans rather than to buy a home, indicating that low interest rates have so far failed to free up the frozen housing market.”
Clearly lower interest rates will not fix our housing problem however lower prices will help. As the economy continues to stuggle and we move deeper and deeper into a recession there are additional challenges as well but bringing prices back in line with real value will go a long way toward the cure in my opinion.
It’s 9:30 pm on New Years eve….I am going to stop thinking about real estate and spend some time celebrating the new year with my family and friends (I snuck away long enough to do this post). I wish you and your family a happy, healthy and blessed 2009!
By: Dennis Norman
In my last post I looked at the purchase of a new home as an investment and how it has fared as an investment over the past few decades. My analysis showed that an investment in a new home has historically (at least during the 38 period I covered) performed close to the Dow Jones Industrial Average, and in the past 8 years out performed it by a significant amount proving that, as an investment, a new home does fine over time.
That post just looked at new homes and I promised I would do the same analysis of an investment in an existing house and here it is. Below is a table showing median prices of Existing homes in 10 year increments starting with 1970, I then added 2005, 2007 and 2008 to bring the data into Read more…
By: Dennis Norman
Right before Christmas I did a 3 part series on malls and shopping centers in which I expressed my reluctance to shop at them and asked the question: is the mall going to go the way of the dinosaur? Unbeknownst to me at the time there may have been more relevance to that question than I realized based upon some facts cited in an article that came out this morning on the Boston Herald website.
In the article, Donna Goodison says “Burt P. Flickinger, managing director of New York consulting firm Strategic Resource Group, expects 2,000 to 3,000 U.S. malls and shopping center to close in March and April”. She goes on to state “General Growth Properties, Inc., the nation’s second-largest shopping mall owner, is already in trouble.” Now I’m not sure how many malls and Read more…
By: Dennis Norman
Lately, with the exception of mortgage interest rates, most of the news about the housing market is not very pretty. I have seen several articles suggesting it is smarter to rent a home than buy and that buying a home may not be a good investment. Earlier this month I wrote a post suggesting there was more “value” to a home than just monetary gain however this morning I decided to look at home ownership from purely an investment perspective.
Today I just focused on the purchase of a new home versus existing home but will probably do a similar analysis for existing homes soon. I’m not an economist and don’t have a phd but my analysis was based upon the most accurate data I could find, the source of which is all disclosed. For starters Read more…
By: Dennis Norman
Let me just start by saying “yeah, sure” in reply to my headline. I copied the headline of this post from several websites I found advertising that you could buy government homes for “pennies on the dollar”, at “cheap” prices, “HUGE discounts” and so forth. Many of these sites charge you to reveal to you these government bargains.
I’m not saying there are not good opportunities occasionally to purchase property at a good price from the government, I just don’t think most the deals are at the huge discounts advertised by some sites. In addition, while finding information on government owned property IS easy I don’t think finding the good deals is. Similar to buying REO’s I wrote about a few weeks ago, it will take a lot of work and due diligence on your part to sort through the deals being offered and find Read more…
By: Dennis Norman
For the eighth week in a row, the interest on fixed-rate home loans has fallen according to the Primary Mortgage Market Survey released this week by Freddie Mac. The survey shows interest rates for a 30 year fixed-rate mortgage have dropped to an average of 5.14% nationwide, down from 5.19% the week before. This is down from 6.17% a year ago and the lowest the rates have dropped since Freddie Mac first began the Primary Mortgage Market Survey in 1971.
The region of the country with the lowest rate is the North Central region where rates averaged 5.08% and the highest region was the Southeast Region with a rate of 5.23%. The average cost in fees and points was 0.8% meaning on average a borrower would be charged about $800.00 in points and fees for every $100,000 borrowed.
Read more…
By: Dennis Norman
The Office of the Comptroller of the Currency and the Office of Thrift Supervision issed a report on mortgage performance which showed an increase in delinquencies, foreclosures in process, and other actions leading to home forfeiture but offered a little ray of light with a drop in “newly initiated” foreclosures by 2.6% from the second quarter to third quarter of 2008.
The report shows banks and thrifts are definitely working with borrowers trying to keep them in their homes Read more…
By: Dennis Norman
The Office of the Comptroller of the Currency and the Office of Thrift Supervision issed a report on mortgage performance which showed an increase in delinquencies, foreclosures in process, and other actions leading to home forfeiture but offered a little ray of light with a drop in “newly initiated” foreclosures by 2.6% from the second quarter to third quarter of 2008.
The report shows banks and thrifts are definitely working with borrowers trying to keep them in their homes Read more…
By: Dennis Norman
By now you may be asking yourself how my rant about malls relates to you, the real estate investor? It’s just to stress the fact that residential real estate is a good investment even when we are facing challenging times like the present. Sure, values may drop at times, like now, however since rents are not dropping the short term drop in value should not affect you as long as you are not in a postion where you HAVE to sell. Lower prices should just present more opportunity for you to expand your rental portfolio at a lower cost of entry than before (in the stock market world this is called “dollar cost averaging” and if it makes sense for stocks it should make sense for real estate in my opinion.
Additionally I think there are several other things that make investment in residential real estate attractive Read more…
