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Call Those Fence Sitting Investors..The time is Now

By
Services for Real Estate Pros with ZIP Realty, Inc-Houston District Realtor Lic# 0257193

Listen up folks.  You need to start calling your investors ...calling those fence sitters that have been sitting too long. I'm sure you have heard this. The Federal Reserve just said they are going to start buying Treasury notes and bonds.  Let's review some of what Fed Chairman Ben Bernanke said recently in Austin, Texas:

"The second arrow in the Federal Reserve's quiver - the provision of liquidity - remains effective," he said. "The Fed could purchase longer-term Treasury or agency securities on the open market in substantial quantities. This approach might influence the yields on these securities, thus helping to spur aggregate demand."

Did you catch that?  Folks mortgage rates are going EVEN LOWER.  Why?  Mortgage rate are directly tied to the 10 year treasury.  As the Fed comes in and buys them up, that will send the yield on the treasury even lower, therefore reducing the overall rate on the 30 year mortgage.  

And there's more good news.  Just last week the Fed announced that it would be buying $100 billion in debt from Fannie and Freddie, and around $500 billion in mortgage backed securities.  Now what do markets do?  They anticipate action and price it into the equation ... so if you're a Realtor, a loan officer, or a real estate investor, this is our version of a Bailout.  Look for the 30 year fixed to stay well below 6%!

Are you ready for this new statistic, reported by the Wall Street Journal?  TransUnion LLC, the Chicago-based credit bureau, predicts that 7.17% of consumers will be at least 60 days past due on their mortgages by the fourth quarter of 2009.  That's nearly double where it is today. 

There are a lot more loans that will be resetting throughout 2009 through 2011. If you think that REOs and short sales are slowing you need to get your head on straight!  They will EXPLODE in 2009.  Loan modifications can only have so much impact...

Bank of America announced that it would be eliminating at least 10,000 investment banking jobs as it soaks up Merrill Lynch.  The combined companies will have about 260,000 employees, with 50,000 representing the investment banking division.

And finally ... someone got a brain in the public relations department at the Big 3 Automakers.  General Motors announced today that its CEO, Rick Wagoner, would drive to Washington instead of flying.  The CEO who flew by private jet in for his last appearance will drive a Chevy Malibu hybrid from Detroit to DC.  Ford's CEO, Alan Mullaly will also be driving from Detroit. 

Check this out!! All Pain and No Gain?

While the most recent data released by the Federal Housing Finance Agency (FHFA) may initially seem to indicate "all pain and no gain" taking time to delve a little deeper into the numbers shows a few clear-cut nuggets in an otherwise pan of silt.

 The pain..U.S. home prices fell 1.8 percent in Q3 as compared to the previousquarter...the largest in the purchase only index 17 year history.

 Four states continue to see double-digit declines including Nevada (-20.9%), California (-20.8%), Florida (-16%) and Arizona (-13.5%).

Some gains...Some states actually managed to exhibit price increases even while most of the nation continued to show declining sales figures; North Dakota (4.0%), South Dakota (3.9%), Texas(3.2%), Alabama (2.8%), and Oklahoma (2.8%). Some cities also showed price appreciation including Austin-Round Rock, TX (5.6%), Augusta-Richmond County, GA-SC (5.5%) and Rapid City, SD (5.4%).

 So what does this mean to us...Tell Your investor friends and neighbors NOW is the time to get into Real Estate.  Use Voice Broadcasting to spread the word.  Word of mouth is good also.  Texas is alive and ready.  So are other states.  Get out and find those properties and locate those end buyers. Do those short sales and get those REO's.  Have we got a deal for them.  May this be a great way to end the old year and begin a New Year.

Comments (6)

Phil Williams
Foreclosehelp.com - Covina, CA

Wow, excellent post. Recently I saw a diagram of our nations Adjustable Rate Mortgage Reset Schedule and thought to myself until 2012? I'd like to see what the overhead view of the schedule would look like. This would tell us were geologically the epicenters of the adjustments are to take place, thus providing the data to know were we should focus our efforts.

Thanks,

Phil Williams

Dec 03, 2008 07:06 PM
Don Eichler
Eichler Properties - Granbury, TX

Charles, Good post, you and I think along the same lines.  Phil's point was a good one as well.

Dec 31, 2008 07:01 AM
Bobby Wallace
Vacant Land Solutions - Charleston, SC
Sell Your Vacant Land The Hassle Free Way!

Charles - most smart investors have been buying (Imagine what the market would be like if they weren't!)

I appreciate you!

Dec 31, 2008 07:52 AM
Charles Gardner-Realtor/Investor
ZIP Realty, Inc-Houston District - Humble, TX

Booby,

Thanks for the comments and what would it be like if investors weren't buying.  We know it would be a bigger disaster/  Here's to an awesome 2009.

Dec 31, 2008 02:37 PM
Charles Gardner-Realtor/Investor
ZIP Realty, Inc-Houston District - Humble, TX

Phil,

Maybe you should join our information webinars.  It gives daily/weekly insights into the economy when it comes to real estate and short sale investing.  Tahnks

Dec 31, 2008 02:39 PM
Charles Gardner-Realtor/Investor
ZIP Realty, Inc-Houston District - Humble, TX

Don,

Thanks for the comment.  Much success in 2009.

Dec 31, 2008 02:40 PM