So, How Bad is the Housing Bubble?
Tuesday, September 25, 2007
It seems that we can't go a day without hearing about the "Housing Bubble". Even if the media wasn't reporting it, the signs of a Housing Bubble are all there:
- Your neighbor's house has been on the market for months.
- The Nation is seeing record breaking foreclosure numbers.
- The Subprime Mortgage mess.
1. Foreclosures - More than half a million homes entered foreclosure from Jan - June 2007. That's 530,000 homes in 6 months. This represents the highest foreclosure rate in 50 years.
Source: Realty Times
Figure below shows U.S. foreclosures (in hundred thousands).
Source: Efinance Directory
2. Subprime Lending - If you told your grandma that you had a Subprime Mortgage, she would probably slap you in the face. Not because she thinks you're irresponsible with money, but because she's never heard of a 'Subprime Loan'. They didn't exist until the lat 1990's.
Quite simply, a Subprime loan is "a loan for those who do not qualify for the best market interest rates because of their poor credit history. In other words, a loan for somebody who probably cannot afford to pay it back. Sounds like a great deal.
Here's the data for Subprime Loans (% of all loans issued):
1990 - 0%
2000 - 8%
2007 - 25-30%
Ok, so 30% of all loans are held by borrowers who are 'at risk' and as you might expect, these borrowers are contributing to the delinquency rate.
Figure 21 shows Suprime loans (in thousands) that are delinquent.
Figure 19 shows the increase in Non-Prim mortgages.
Source: Harvard Joint Center for Housing Studies
3. Inventory - When housing was 'booming' and interest rates were at their lowest, builders were going crazy trying to fill the demand. Now we see many areas overbuilt and a lot of these new homes vacant.
Figure below shows the rise in unsold homes (new construction).
The trouble is, the price has not corrected to a level that is affordable to most buyers.
Source: Harvard Joint Center for Housing Studies
posted by author @ 7:51 AM,
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How to Select a Realtor
Wednesday, September 19, 2007
I get a lot of emails asking me for references for a good Realtor. Most of these requests, you may be surprised, also ask for a "Hot Realtor". Now I think that is simply ridiculous. These types of request are childish and I will have no business engaging in this type of conversation.
When searching for a Realtor, you should consider experience, expertise, and knowledge in your local area, etc.
I have hand picked 5 Realtors that I would refer (based loosely on experience, expertise, and knowledge).
1. www.juliaabraham.com
2. www.sharitherealtor.com
3. www.naplesoffice.com
4. www.for-sarasota-mls.com
5. www.heidiamshoff.com
posted by author @ 7:42 PM,
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Mortgage Broker Pimps
Monday, September 17, 2007
You read the title correctly - and I'm not exaggerating.
A New York couple (both mortgage brokers) had a hard time paying their mortgage (oh, the irony) and was facing foreclosure. So, what did they do? They turned their house into a brothel.
Nice.
Read the story @ money.cnn.com
posted by author @ 8:00 AM,
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Best Real Estate Blog in the World?
Monday, September 10, 2007
Ahem. Housing Boom was just ranked as one of the top 100 Real Estate Blogs by International Listings. I'm assuming that this means we are one of the top blogs of the century.
Prove me wrong.
International Listing
(Scroll Down to 'Doom and Boom')
posted by author @ 5:28 PM,
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