Newletter

FALL QUARTER

 

2011 IS ALMOST OVER!!!

Well folks, at last in our area we have seen Inventory reducing and there are less REO’s(Bank Owned) and Short Sale Properties. Many with offers pending. Which means that there is room for the “Standard Sale” property owner. to come on the market now. However generally only for a seller that has owned his property for many years. Those that purchased in the last 12 yrs, are still owing more that it will appraise for in today’s market.

 

More Good News!

Investor Buyers are again looking at Real Estate, as the most dependable avenue of long term investment. They are being selective in Location and Rental potential. Due to the the overall economy very few folks have gone unscathed” financially and it will be years before most of the population will be able to qualify for Homeownership, even with the low interest rates, the demand from lenders of 20% down, (when most folks are hardly getting by each month,) will limit the ability to put savings aside. This will create a large demand for rental housing over a period of 7-12 yrs. By selecting premium locations and areas of potential growth, like our

area. Then practice patience until the market rebounds the potential for profit is still there.

NOT OUT OF THE

WOODS, YET!

A new wave of Adjustable Rate Mortgages are being offered. In general, say “NO

THANKS”!!!, For those that feel OK, about committing to a future increase in your mortgage payment make sure that you have at least a 30%+ cushion in your monthly income. To allow for any adjustments, or we will only repeat the chaos.

( Many mortgages (ARMs) are scheduled to reset upward between 2010 and 2011. which might cause another wave of defaults, delaying recovery for another 2 yrs, as homeowners are unable to cover the increased mortgage payment.)

 

MORE STRIGENT QUALIFYING CONDITIONS!

The newest loans, Qualified Residential Mortgage (QRM)

will require a mandatory 20% down, to get the most favorable loan terms.

Self employed, will find it harder to qualify for a Mortgage, Lenders are tightening loan requirements.

Proof of income must be documented up to three years back. Monthly profit and loss statements for the current year, spreadsheets of income and expenses, and be prepared to offer any explanations for any income fluctuations and flow of money. So, in a nutshell, if you are thinking of purchasing a home, better get ready to submit a raft of paperwork to support any thing you place on your loan application.

 

POSITIVE SIGNS OF RECOVERY

Quantity of Jobs .

Directly effect Home- ownership statewide. Without a job, a family is unable to qualify for even an Apt. much less a mortgage. Figures have been quoted of 1.500,000. jobs lost in California, since 2007. It general, takes a period of 4-5 yrs after times of reduced employment for the economy to slowly show signs of recovery (2012-2013).

However, it is forecast that it might be 2018 before the Y-Generation’s demo-graphic influx of first time buyers, be felt. Economists are predicting home prices will not fully stabilize until the end of 2014.

For those seller’s seeking investment properties to appeal to that generation

the homes will most likely have to have features that will have state of the art

technology systems. When doing any remodeling or upgrades keep this in mind. Items, like internet connection, low energy appliances, solar features, all will be a “key” to attract this new generation of home buyers.

While we are waiting for that period of recovery, the income producing real estate will remain an area

of promise. For present income and the long-term

return on investment..