I believe a wave of pre-forclosures, short sale situation are coming. The low adjustable rate mortgages are adjusting up and the borrowers can't afford the new payment. Some were hoping to sell the homes before the adjustment, the market squashed that dream. I, like a lot of investors bought pre-construction to turn and flip for profit upon completion. The market changed that goal. We had to put renters in that don't cover the costs. Some can hang on, some can't. I get calls from owners in the same situation, I can feel their pain, I feel the same pain. With the depreciation that we have undergone in our area, people can't refinance for lower rates, because the amount of their mortgage is now higher than the value of their homes.
What are the solutions? Unfortunately, I don't have the answers. What will the future hold? Should we hold on to these properties hoping the market will make a turn around and how long will it take?
The only clear solution would be an increase in sales, to lower inventory, to increase price. It's the old Economic 101. Supply and demand affects price.
As a Realtor, I see a pick up in activity in the market, more sales, more activity, more inquiries, more internet contacts. Properties are a very good value for Buyers. The interest rates on mortgages have lowered. Now is the time! You never know when the bottom was until it is too late. Now is the time to buy, now is the time to contact whatever Buyers you have spoken with recently or in the past and tell them, now is the time to buy.
We are looked upon as the experts in the industry (at least by some if not by most). We need to use that credibility to promote this. Prices on homes are excellent, compared to 1 or 2 years ago, you can get so much home for the money now. I think many are sitting on the fence, but now is not a time to wait. Now is a time to buy!