"UNDER WATER"??? WHO'S UNDER WATER?? WHAT'S UNDER WATER??
* * * * WARNING! HARD CORE REAL ESTATE TALK * * * *
WHO IS UNDER WATER?
A huge percentage of the American Consumers.
HOME OWNERS ARE UNDER WATER. 25% - 33% of all home owners in the United States of America. Beginning in about 2006, we in the real estate industry began to see a shift.
HOME PRICES SKYROCKETED. Fueled by lower than ever interest rates and less than intelligent mortgage instruments, home prices had reached a point where the average prospective home buyer could no longer qualify to buy the average home price in their area of choice. Sales plummeted and almost minute to minute, prices began to drop. The price reduction didn't stop and in fact continues. Home values dropped about 8% nationwide in April 2011. That's about 4 years to the month that the market began it's downward spiral.
"Honey, do you think we'll ever be able to buy a home?"
"I don't know Dear, the prices have gotten so high, even with low interest rates,
we're not going to qualify for a home near the children's schools."
FOUR YEARS LATER, prices are lower than ever. Even lower than ever interest rates are no incentive for the average American with a brain to feel secure in investing in a piece of real estate today. Investors are making opportunistic buys of REO properties for rehab or rentals.
FAST FORWARD TO 2011.
CATASTROPHE #1. THE REAL ESTATE INDUSTRY IS MORIBUND!
TARP, STIMULUS, ETC. The government made the decision to save the financial industry and the Wall Street Gangs rather than home owners who were damaged far more. (It's my blog and I'm entitled to my opinion.)
THERE IS NO 'MOVE-UP" MARKET! Home owners who would sell and move up or down are prisoners of their mortgage.
MORTGAGE APPROVAL. Financially secure home buyers find that obtaining mortgage approval is harder than ever.
GSEs and HUD have increased the cost of mortgages to a point where many consumers no longer qualify for a home in their area of choice.
FOUR YEARS LATER, about 40% of the American consumer has damaged credit due to the loss of their home, loss of their job, loss of their credit. This huge population of American consumers will NOT be buying homes for years.
WHAT IS UNDER WATER??
CATASTROPHE #2. THE AREA OF THE UNITED STATES THAT BORDERS THE MISSISSIPPI RIVER (Ten States). See the map of the massive flood area HERE. Does anyone reading this believe that this flooding catastrophe will not cause a further deterioration of the economy?? Just a few of the future damages include:
Loss of Income. Many will face temporary or permanent unemployment as areas try to recover the physical damages to their businesses and homes.
Loss of Shelter. Thousands of area residents are in shelters with their homes partially or totally under water. The structural damages to these homes will, in many cases, permanent cured only by destruction and rebuild.
MOLD! Yes, that dreaded word mold. The American public became aware of the long term harm done by flooding when, about 10 years ago. Pennsylvania suffered a catastrophic flood. Insurance companies were slow to respond to the damage claims and homes sat for weeks or months before the process of clean-up and repair/rebuild began. That was the first time the American public, and Lenn, became aware of the word stachybotrys. Since that time and as a result of publicity of the health problems associated with mold, insurance companies respond faster. Let's hope the insurance companies respond swiftly this time. The areas and damages are MASSIVE. I also made it a broker policy that states "We do not sell homes with visible mold growths". Sure, that's a matter of risk reduction for my company. It's also a fact that I will not be a party to a real estate transaction that puts children in danger due to toxic mold. Adults can take care of themselves.
"Sorry Honey, Lenn says we can't go inside of this house."
"That's O.K., I read the information she sent.
No need to expose the children to potential harm."
IS MOTHER NATURE DOING A BIT OF "PILING ON"??
Courtesy, Lenn Harley, Broker, Homefinders.com, 800-711-7988.