Posted on: 22nd Nov, 2007 10:04 am
Happy Thanksgiving to all at mortgagefit!
That said, always a good time for a little market doom and gloom :wink:
Over the past year or so, I've seen every angle of the local and national real estate, and mortgage, market. It seems every week there are numerous articles and stats showing the decline of the housing market. A lot of that is a bit alarmist, but generally true.
I don't know what other pros on the site think, but I fear that 2008 will be even worse than where we all sit today. I don't want to believe that, but I think that's the direction we're headed. Most of the "experts" are also saying that it will 2009 before the pendulum starts to swing back.
I wrote about this a bit on my recent Blog posting, geared towards home sellers.
Curious to know what you think. Best regards,
Ken L.
That said, always a good time for a little market doom and gloom :wink:
Over the past year or so, I've seen every angle of the local and national real estate, and mortgage, market. It seems every week there are numerous articles and stats showing the decline of the housing market. A lot of that is a bit alarmist, but generally true.
I don't know what other pros on the site think, but I fear that 2008 will be even worse than where we all sit today. I don't want to believe that, but I think that's the direction we're headed. Most of the "experts" are also saying that it will 2009 before the pendulum starts to swing back.
I wrote about this a bit on my recent Blog posting, geared towards home sellers.
Curious to know what you think. Best regards,
Ken L.
Hi kenl,
Happy Thanksgiving Day to you and all the members of Mortgagefit :)
Yes you are very right that this has been really a year of decline in the housing market. Foreclosure has been increasing to a great extent in this year and people have never faced this before. I have seen your blog. This is really a well written and well maintained blog. I appreciate your hard work.
Thanks,
Larry
Happy Thanksgiving Day to you and all the members of Mortgagefit :)
Yes you are very right that this has been really a year of decline in the housing market. Foreclosure has been increasing to a great extent in this year and people have never faced this before. I have seen your blog. This is really a well written and well maintained blog. I appreciate your hard work.
Thanks,
Larry
Happy Thanksgiving to all the members of Mortgagefit.
Yes Kenl, this is really alarming. The turmoil in the financial market has finally hit the housing market. The experts are expecting this decline to continue.
I have checked out your blog. That's really informative.
Yes Kenl, this is really alarming. The turmoil in the financial market has finally hit the housing market. The experts are expecting this decline to continue.
I have checked out your blog. That's really informative.
I have to somewhat agree, however we have continued to increase our production month over month. I really believe there is an overall downturn in the market however if you postion yourself correctly and make sure that you take care of your referral partners, there will always be business to be had. There are plenty of people buying right now and I think the spring wil actually be pretty good. The problem here is everyone expects it to go back to a few years ago and thats not going to happen for a while. This reminds me of the the mid 1990's when I first got into the business.
Take everything in stride, be good to your customers, ask for referrals and you will always have enough business to survive.
Have a great holiday season!
Take everything in stride, be good to your customers, ask for referrals and you will always have enough business to survive.
Have a great holiday season!
Welcome Max,
I agree with you. Everyone wants to be a part of the time when things work out exactly the way they want. But that's not possible always..the economy and the market keep changing and whoever can fight and mould oneself into the current pattern would rule actually. That's the way it works i guess.
But thanks anyway Ken and Max sharing your thoughts with us.
I agree with you. Everyone wants to be a part of the time when things work out exactly the way they want. But that's not possible always..the economy and the market keep changing and whoever can fight and mould oneself into the current pattern would rule actually. That's the way it works i guess.
But thanks anyway Ken and Max sharing your thoughts with us.
I believe its a matter of how far the "pendulum" will swing. So long as the market has enough liquidity to compensate everything will be fine but there is a breaking point out there somewhere and if its reached then the system will break or lockup and we will see tremors all over the economy.
Lets hope for the best.
Lets hope for the best.
ken, you've started an interesting topic, no doubt about it.
it's true that there can be decline in home sales by 12% (reports fannie mae) and that can affect the mortgage market as well. even refinance originations are expected to decline from 1.2 trillion in 2007 to 1.1 trillion in 2008 - that's not too high a decline though.
foreclosure rates may be higher due to a number of subprime loans reaching the reset period by the beginning of 2008.
however, the housing market is expected to stabilize by the second half of next year.
it's true that there can be decline in home sales by 12% (reports fannie mae) and that can affect the mortgage market as well. even refinance originations are expected to decline from 1.2 trillion in 2007 to 1.1 trillion in 2008 - that's not too high a decline though.
foreclosure rates may be higher due to a number of subprime loans reaching the reset period by the beginning of 2008.
however, the housing market is expected to stabilize by the second half of next year.
I think the market will contract a bit but most of the contraction is in areas that had huge gains in the last few years. So really its just taking some of those back. I know there are areas of the nation like california that people have come to bank on the appreciation and are in a panic on just the thought that they might not make 100K this year in equity. People need to relax and just live in their home. It doesnt matter what your home is worth if you are not selling it.
Great topic. I think it really depends on what area of the country you live in, and even what part of a county or city, for that matter. For example, where I live in San Jose, CA, there are areas that are still going up in value, and 20% of the homes for sale receive offers above list price.
However, 10 miles away, prices are dropping, and sales have slowed to nearly a one year supply.
For us mortgage brokers, there are plenty of niches where buyers will want to grap a house at a potentially great price in pre-foreclosure or even an REO, and of course, millions of folks will want to refi as their ARMs or Neg Ams come due for an adjustment.
For the general public, now is the time to get those FICO scores up and tighten the budget to increase cash reserves. That will help when you're ready to either buy or refi.
However, 10 miles away, prices are dropping, and sales have slowed to nearly a one year supply.
For us mortgage brokers, there are plenty of niches where buyers will want to grap a house at a potentially great price in pre-foreclosure or even an REO, and of course, millions of folks will want to refi as their ARMs or Neg Ams come due for an adjustment.
For the general public, now is the time to get those FICO scores up and tighten the budget to increase cash reserves. That will help when you're ready to either buy or refi.
Ken, thanks for the great thread and great blog. Please keep it going. My guess is that even without a crystal ball that you were able to see the potential for a real estate recession prior to Greenspan's 'micro-bubble' speech almost two years ago. Most people in all aspects of real estate transactions from the buyers to Wall Street were averse to any suggestions of the potential of real estate over-inflation and most people only focused on the recent reports and trends, of course all of which showed excellent growth. One to five percent appreciation per month will never be sustainable, at least in our economy. When everybody is saying 'buy' it's usually a great time to sell.
Okay, everyone still in the business is now aware of the down trend, so when does it turn and what do we do to survive until it does?
First, be enthusiastic. The anxiety of uncertainty is now gone. The damage that was happening to our industry by the over-availability of money is being mitigated. We should see bottom much more quickly than the real estate recession we experienced in the 1990's. The types of loans that were obtained were on average much, much more volatile and the leveraging was far greater than 15 years ago. With this in mind, the last quarter of 2008 should be the worst time to be in the position of having to sell a home. I think the first quarter of 2009 won't be much better but as long as rates climb back to what are truly reasonable for a healthy economy (i.e. NOT in the 5% to 6% range!), there shouldn't be much holding real estate values from bouncing off the bottom. A very good rule of thumb is when real estate cash-flows, real estate sells. Even here in California we are beginning to see the potential for positive cash flow. Also, when owning is truly as affordable as renting, real estate sells.
So that brings me to my other point, there absolutely will be people buying and refinancing homes in 2008 so there will be a need for mortgage professionals. If you were wise and lived within your means and built reserves, life will be less stressful for you this year. If not, tighten the belt, buckle down and go back to the basics. Focus on what made you the outstanding mortgage professional that has gotten you this far. Look forward to the fact that when the market turns for the better that there will be far fewer mortgage personnel in the business.
The light is right there at the end of the tunnel.
Okay, everyone still in the business is now aware of the down trend, so when does it turn and what do we do to survive until it does?
First, be enthusiastic. The anxiety of uncertainty is now gone. The damage that was happening to our industry by the over-availability of money is being mitigated. We should see bottom much more quickly than the real estate recession we experienced in the 1990's. The types of loans that were obtained were on average much, much more volatile and the leveraging was far greater than 15 years ago. With this in mind, the last quarter of 2008 should be the worst time to be in the position of having to sell a home. I think the first quarter of 2009 won't be much better but as long as rates climb back to what are truly reasonable for a healthy economy (i.e. NOT in the 5% to 6% range!), there shouldn't be much holding real estate values from bouncing off the bottom. A very good rule of thumb is when real estate cash-flows, real estate sells. Even here in California we are beginning to see the potential for positive cash flow. Also, when owning is truly as affordable as renting, real estate sells.
So that brings me to my other point, there absolutely will be people buying and refinancing homes in 2008 so there will be a need for mortgage professionals. If you were wise and lived within your means and built reserves, life will be less stressful for you this year. If not, tighten the belt, buckle down and go back to the basics. Focus on what made you the outstanding mortgage professional that has gotten you this far. Look forward to the fact that when the market turns for the better that there will be far fewer mortgage personnel in the business.
The light is right there at the end of the tunnel.
