Remember, Real Estate is Local
It's hard listening to the news without hearing all the gloom and doom about the demise of the housing market. There is a lot of truth to what is being said. But that's only part of the story. The important thing to keep in mind is what's happening in your neck of the woods.
No question that the mortgage market is going through some tough times. All the low down-payment loans made to marginally qualified buyers with adjustable-rate mortgages are at the root of today's problem. Loans for qualified borrowers, as a result, became harder to get with more documentation needed. The good news on the mortgage front is that rates peaked last year and have been declining, thanks to the Federal Reserve's multiple rate cuts. The conventional wisdom is that rates may have bottomed out for now.
Soon many lenders will start lightening up on the never-ending request for information as the sub-prime mess becomes a distant memory. That will make things easier for most people as we approach the key selling period next year. It will probably be a long time before those no-questions-asked loans will be available again to weak borrowers.
It is also true that foreclosures are up significantly this year in my state (California), as well as nationally. The bulk of foreclosures in California are heavily concentrated in the southern part and in the central valley.
The one thing you need to understand about real estate and this is the thing that really separates it from other industries, is that it truly is local. What's happening in San Diego or Miami or Sacramento has little bearing on our market. They all sort of move independently of each other. The only commonality is the mortgage market.
What's going on in the local market will impact housing. Things like new subdivisions, disasters or employment issues will greatly affect real estate in terms of inventory, sales volume or prices.
My area, for example, is one of the few counties in California where home prices are still actually rising. While the gains over the past two years have been modest, the good news is that they are up. And that's better than what most of the other counties in our state can say.
To find out what's happening where you are, ask your Realtor for the economic forecast from your state's Realtor association. They will break it out by county with their prediction for this year and next year.
So the next time you read about all the troubles in the housing market, just remember that it may not be happening where you live.
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Steven Hyman is broker and owner of Century 21 Sunset Properties Half Moon Bay, CA.
Comments
Great point! It's easy to get caught up in the media hype on the Real Estate mess. How do you know when you're working with a reputable mortgage broker? Any tips on identifying the good ones?
It is very easy to find a good mortgage broker/lender. Ask your Realtor. They will know who is good. After all, they work with lenders and brokers almost every day. And they only refer the ones who get the job done.
Good post, the media has definitely been focused on the negative aspect of the industry and it has definitely impacted our consumer point of view. Just curious, what do you think about the proposed Housing Aid Bill and the government's foreclosure rescue plan? Do you think it will offer long-term relief or just provide a temporary lifeline to struggling homeowners?
Steven, What if you get a bad referal? This happened to me personally, b/c the agent I was using was new to the industry. But I was unaware of that at the time.
Considering how many people in this country are in some form of foreclosure, it seems the new bail out bill only reaches a small percent of those effected. What wasn't clear from the news about this is that hopefully the IRS laws have been changed regarding short sales. It seems around 400,000 people will be able to get some sort of FHA or Famie Mae loans. And that's a good thing.
If you got a back referral from a new agent. Ask him to ask his broker for some other names of lenders. You can also tell the mortgage person directly that you are not satisfied with their service and performance. If necessary, talk to their boss about the poor service. That usually get results. Also, if time permits, go to a different lender. But that will be more time and effort and maybe expense for you. Best is to have that heart to heart conversation. We are all in the service business so it matters what people think.
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