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Real Estate Today

By
Real Estate Agent with Real Pro NW.com

Real Estate Today

This is my first attempt at writing a blog.  For those of you over thirty, you may not be familiar with blogging.  Simply put, blogging is a means of sharing ones expertise on any subject with anyone else in the world who may have an interest in that subject.  It also allows readers to reply back with their thoughts and even link up their website so that people reading one blog will have access to other like blogs. 

How did we get here?

     I am going to share with you my expertise from twenty plus year in the real estate industry.  I will begin with a brief summary of what is happening in today's housing market.  I am sure that by now you have been bombarded with articles and statistics telling you how bad everything is and how the foreclosure rate is rising every day.  How did this happen.  Over the past five or so years, the mortgage industry and the investment market joined hands to create new financial instruments to sell packages of home mortgages all over the world.  As the demand grew for these new products, the mortgage industry continually loosened the standards on these mortgage packages to keep the product and the profits going.  As the volume went up the quality came down until it was little more than a pyramid scheme.  As these low quality mortgages began defaulting, and the promised profits began disappearing,  the demand for these investment products just died, and the mortgage companies no longer had a source of funds.  So the Fed steps in and lowers the cost of funds by 3% which the mortgage companies and banks keep by not lowering the rate to buyers a penny.  Ain't life grand!   What do you think would happen if it was you who screwed up your business, and needed help?

     All is not lost.  Good loans are still available if you have good credit and a reasonable down payment.  For some people this is a time of opportunity.  If you are struggling with your  mortgage  there is precious little help out there for you, but you should get the advice of a trusted mortgage broker before you do anything rash.  We know that both the real estate market and the stock market are cyclical and tend to go up and down in approximately ten year cycles.  We know that we have adjustable rate mortgages in the pipeline that will be adjusting up until mid 2010.  Should we expect the foreclosure rate on those loans to be any less than it is now?  I think not.  Should we expect this down cycle to be any shorter than what we have experienced in the past?  History would answer no.  So what does this mean to your pocketbook?  Money can be made in down cycles as well as up cycles.  You just have to be a lot more astute with the information available to you before you invest.  That's what I will talk about in my next blog.

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