Mortgage Resets, Here Comes the Next Wave

Mortgage Resets, Here Comes the Next Wave!

I posted this on my real estate blog, Karen's Perspective, back in February, but I thought my ActiveRain community should see this graph as well.

I know everyone really wants to believe the housing market is going to get better in 2010. I know we’ve all had enough of the gloom and doom, but it appears we have to brace ourselves for more of the same, at best.

We’re so used to turning the channel when we get bored with what’s on. We expect to drive up to the window and have our food ready. We swallow a pill in anticipation of instant headache relief. But, from the looks of this graph, we’re going to be in this one for a while.

From the graph, you can see the first wave that's already passed, the grey wave.  It peaked mid '07 then again in January '09.  Those were the sub-prime loans resetting that put us into the tailspin we're just now trying to come out of. 

The next, and far more layered wave is just beginning to form.  You can see the dotted line where it began in January 2010.  It is 4 layers deep - the grey sub-primes, the red prime loans, the blue Alt A's and the yellow Option Arms.  Everything peaks mid year 2011.  Hang on, boys and girls, it's going to be a bumpy ride.

Add to that all the "shadow inventory" the banks have taken back and are still holding that some people say is more than they've already released.

But, it’s better to know ahead of time to be prepared. Stop spending. Save what you can, when you can. Scale back, downsize, reuse, recycle. The real estate market will eventually come back strong. It always does. We’ll just have to be patient a while longer.

So, what’s the good news? There’s never been a better time to invest in real estate. Can you?  If you live in the Triad area of North Carolina, I’d love to help you with your investing. Check out my Triad Master Mind website. It’s a great group of local investors and we’re all working together to help each other profit through real estate.

Don’t wait to invest, invest and wait! Huge returns will be there to reap in your future.  There's never been a better time to be an investor.

What do you think it will do to the retail Realtor market?  Ready or not, it's coming.