Sunday, September 16, 2007
Tuesday, August 21, 2007
Buying and Selling
With everything going on with the mortgage world people are wondering what is going to happen to our real estate market. Well, the truth is that lenders went hog wild giving everybody and their brother credit without requiring down payments and with crazy loan programs that set many people up for failure.
And that's what we got...failure of many, many people to repay their loans and to go into foreclosure. For those of you that don't know how the lenders do business; banks, credit unions, and mortgage companies loan money to consumers to buy homes. Then they package up millions of dollars of loans and sell them to FannieMae, FreddieMac, and other investors (this is the secondary market) to generate more money to make more loans. The loans they make must meet the guidelines of the secondary market or they can't be sold. The original lenders make money from the fees they charge to set up the loan and often times they charge a fee to keep collecting payments and servicing the loan for the new purchasers.
Well, with the shakeup of the subprime market(loans for people with less than 20% down and less than perfect credit) caused in part by so many foreclosures, investors are less willing to purchase those packaged loans from the lenders, so now they can't generate more money to make more loans.
Okay, back to "what does this mean to me". If you are buying it means:
1. You may be required to come up with a down payment.
2. You should get fully approved by your lender prior to entering into a purchase contract, to avoid spending money for inspections, appraisals etc, only to find out you can't get a loan.
3. You should look into VA or FHA loans that can allow minimal downpayments.
If you are selling it means:
1. Fewer buyers will qualify for loans to buy your home and it may be on the market longer for that reason. Longer market times mean more inventory for buyers to choose from.
2. Greater inventory means you may want to consider incentives to get buyers interested in your home.
3. You may want to be more aware of curb appeal issues that may cause buyers to pass on purchasing your home. Repairs should be done instead of offering credits to the buyer.
If you have money to invest or are in a position to use some of the equity you have in your current home to invest in other real estate, this is the perfect time to make that move. Of course everyone has different investment goals and risk tolerances that have to be considered, and before you jump in I recommend an investment consultation.
And that's what we got...failure of many, many people to repay their loans and to go into foreclosure. For those of you that don't know how the lenders do business; banks, credit unions, and mortgage companies loan money to consumers to buy homes. Then they package up millions of dollars of loans and sell them to FannieMae, FreddieMac, and other investors (this is the secondary market) to generate more money to make more loans. The loans they make must meet the guidelines of the secondary market or they can't be sold. The original lenders make money from the fees they charge to set up the loan and often times they charge a fee to keep collecting payments and servicing the loan for the new purchasers.
Well, with the shakeup of the subprime market(loans for people with less than 20% down and less than perfect credit) caused in part by so many foreclosures, investors are less willing to purchase those packaged loans from the lenders, so now they can't generate more money to make more loans.
Okay, back to "what does this mean to me". If you are buying it means:
1. You may be required to come up with a down payment.
2. You should get fully approved by your lender prior to entering into a purchase contract, to avoid spending money for inspections, appraisals etc, only to find out you can't get a loan.
3. You should look into VA or FHA loans that can allow minimal downpayments.
If you are selling it means:
1. Fewer buyers will qualify for loans to buy your home and it may be on the market longer for that reason. Longer market times mean more inventory for buyers to choose from.
2. Greater inventory means you may want to consider incentives to get buyers interested in your home.
3. You may want to be more aware of curb appeal issues that may cause buyers to pass on purchasing your home. Repairs should be done instead of offering credits to the buyer.
If you have money to invest or are in a position to use some of the equity you have in your current home to invest in other real estate, this is the perfect time to make that move. Of course everyone has different investment goals and risk tolerances that have to be considered, and before you jump in I recommend an investment consultation.
Friday, August 03, 2007
North East Development
We'll hold off on the official congratulations to Hunt Communities until after the final City Council approval, but it appears that the planned unit development in the North East will be started in the near future. Hunt will add this to several other development projects going on in El Paso.
The selection of a local company to be the master developer for the project is, I believe, a testament to the maturity and growth of El Paso. The El Paso Association of Home Builders should also be pleased that a local company, that will continue to support other local builders through subcontracting, has won the bid. A project of this magnitude that can be bid on and won by local business shows that El Paso isn't just a little hick town on the edge of Texas. No longer will we be the stepchild of the rest of the state.
The North East project, the Medical school, the outlet mall, what's next? How about our sister city's selection as the top maquilladora center in Mexico. This helps El Paso as well since many of the top management in the maquillas buy homes in El Paso.
Even though everyone's talking about a housing slump, the future of El Paso real estate looks bright to me.
The selection of a local company to be the master developer for the project is, I believe, a testament to the maturity and growth of El Paso. The El Paso Association of Home Builders should also be pleased that a local company, that will continue to support other local builders through subcontracting, has won the bid. A project of this magnitude that can be bid on and won by local business shows that El Paso isn't just a little hick town on the edge of Texas. No longer will we be the stepchild of the rest of the state.
The North East project, the Medical school, the outlet mall, what's next? How about our sister city's selection as the top maquilladora center in Mexico. This helps El Paso as well since many of the top management in the maquillas buy homes in El Paso.
Even though everyone's talking about a housing slump, the future of El Paso real estate looks bright to me.
Tuesday, July 17, 2007
Real Estate Investing
Before you decide to rush out and buy a real estate as an investment you must answer some simple questions.
1. What are your investment goals?
2. Do you want instant cash flow, or are you looking for long term appreciation?
3. Are you going to manage the property yourself, or hire a manager?
4. If your property is, or becomes vacant, can you handle the negative cash flow for awhile?
If you are thinking of investing and are interested in a, no obligation, investment counselling session, give me a call. 915-329-5868.
1. What are your investment goals?
2. Do you want instant cash flow, or are you looking for long term appreciation?
3. Are you going to manage the property yourself, or hire a manager?
4. If your property is, or becomes vacant, can you handle the negative cash flow for awhile?
If you are thinking of investing and are interested in a, no obligation, investment counselling session, give me a call. 915-329-5868.
Friday, July 13, 2007
Half Year Stats
Our year is half over and the real estate market has been kind of sluggish, but here are the stats for June.
New Listings... 1498
Homes Sold..... 554
Inventory... 2.7 Months
Average days on Market.... 80
Average Sales Price..... $166,653
Let's compare to June, 2006
New Listings... 1088
Homes Sold... 755
Inventory... 1.4 Months
Average Days on Market... 50
Average Sales Price...$152,399
As you can see inventory is up but so is the average sales price. It is certainly more a buyer's market, but we aren't losing value. Homes are still selling but at a slower pace. What does it mean to you? If you need a faster sale you need to be willing to price your home realistically and be flexible on terms. You can still get a fair price, but it may take you a little longer to sell. Plan accordingly.
New Listings... 1498
Homes Sold..... 554
Inventory... 2.7 Months
Average days on Market.... 80
Average Sales Price..... $166,653
Let's compare to June, 2006
New Listings... 1088
Homes Sold... 755
Inventory... 1.4 Months
Average Days on Market... 50
Average Sales Price...$152,399
As you can see inventory is up but so is the average sales price. It is certainly more a buyer's market, but we aren't losing value. Homes are still selling but at a slower pace. What does it mean to you? If you need a faster sale you need to be willing to price your home realistically and be flexible on terms. You can still get a fair price, but it may take you a little longer to sell. Plan accordingly.
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