For years, real estate has been a good long term investment. Our personal homes are just that, our home. They are a long term wealth builder for most of us who live in them, love them, and keep them current and improved . . . which, along with the economy and apprecation, help to increase their value over time.
In these difficult times, it seems the media always seems to focus on the negative -- all day, every day. So what else is new? Many who are facing foreclosure have borrowed equity from their homes for various reasons. Some are legitimate, but most are taking money they thought was equity, but really was market appreciation. Many who are in trouble spent this money on personal choices based on their spending habits.
We are facing a correction. This correction is an economic correction. It happens in the stock market, in our retirement and investment funds, and now, most visibly, in the housing market.
Dennis Kneale on his recent PARTING SHOT segment on CNBC's Business Nation, spoke about the current foreclosure crisis. I think you need to watch -- he gives an honest, true picture of the real story behind the foreclosure / housing crisis. It's about time someone took the initiative to do this and get more of the true picture out there. Once you watch the video I think your perspective will change.
The Outer Banks real estate market is beginning to show signs of reaching the "bottom" so to speak. Are we there yet? is not just a question children ask mom and dad on their way to the beach! Our buyers are asking that question every day. Once the bottom is reached, everyone will know and the inventory of available homes we have will shrink. Are you watching close enough? Is it your time? Have you kept abreast of the many changes in the mortgage market?
Look for upcoming posts on the new guidelines and trends in the mortgage market.
I always welcome your comments!
The problem with the foreclosures is that many homeowners paid too much for the properties on the hopes that the real estate would continue to rise. The problem in any market such as the Outer Banks is that the properties were inflated more than necessary and homeowners made bad decisions in purchasing a property. Homeowners also purchased on mortgages that they knew they could not afford. Some depended on the rental incomes to pay for the house, which rarely happens. Even now, prices are still high and need to be lowered to really generate sales and turnover of the current inventory of properties. Still waiting for that great deal to come along and have not seen a house for the money that has that "wow what a property" effect on me. Mr. Holt's recent column spoke volumns about the need to fix up some of these properties to help them sell. Carpet, paint, cleaning, etc.. makes the house look much more presentable to the potential buyers. Remember that no buyer wants to spend an enormous amount of money in repairs and renovations after purchasing a property.
If one looks around at the amount of rentals this year, they would quickly notice that there are a lot more houses rented than in the past years. That is a sign of things beginning to turn around.
Posted by: Richard | August 10, 2008 at 02:43 PM