“How To Avoid Becoming A Lemming” -”They Look For Cliffs, Don’t They?”
GROUND HOGG DAY!!!!!!!!!!
I just had to post this article and say ‘It Ain’t No Surprise To Me!” You see I remember the distant past..like the 1980’s when California was booming so much that you could get a porche and a house that should cost you $10,000 a month for only $6,000 and my friends all said I should have one! I gotta admit I was tempted until I asked how it worked and then I immediately knew..”BUST TIME!” And Yes I was right within 6months the whole thing had blown up and the properties had lost 50% of their value and not only the investors were going Broke But so TOO the Banks AKA “The Housing & Loan Scandal”
So Why Would Anyone Think Things will be any different This Time?
You Can Bet Your House and your Amarni shirt On It ….. every few years a Brand New Bunch Of Lemmings Pops Up for The Sharpies, Those Spruikers To Educate just enough so they can Sell them something ..
Be it a Mortgage
An Investment Block
The get Rich Quick By numbers scheme
A Group Deal
We’ll fund it for you deal..
Now I am not saying that there aren’t some good educators, nor am I saying that getting Rich using Real Estate Sucks, What I am Saying is that You need to Know Your stuff and track the Past cycles to know where your are today. And then use that knowledge to make Your Fortune..You gotta know When To Bail out and When To get in..Timing is Critical In Real Estate and more so in the USA>>>>>>
Axel Henriksen “The Wizard Of Wealth”
Housing in the sunshine states is turned upside down!
By Ron Cahalan
EWI Protege and Mortgage Specialist
Housing investors who were speculating on the hot sun-belt state’s real estate markets are finding that they have been burned. Many are walking away from their investment properties and are a big part of what has driven the foreclosure rate on prime mortgage loans to a record high in the first quarter of 2007. The problem is most obvious in California, Florida, Arizona and Nevada.
The trend in these and some other states as well, that had just a short time ago overheated housing markets, are potentially just a glimpse of the problems coming to other areas across the country that many analysts think also experienced a hot market and housing bubble led by strong speculative buying. This was especially visible in condominiums during the housing boom between 2000 and 2005.
Figures from the Mortgage Bankers Association released this week showed that foreclosures are on the rise in nearly every housing category. This is particularly pronounced in the Midwest states where consumers are suffering from manufacturing cutbacks and in the sun-belt states where investors came in droves, all in hopes of making a quick buck by buying and selling homes without holding them for very long (known as ‘flipping’), often times never even renting them out and simply putting them right back on the market at an inflated price.
This trend emerged only this year and has quickly driven the foreclosure rate on prime loans to a record 0.25 percent. Unfortunately, many of these investors were well-off real estate professionals, who have profited by the wave in the housing boom. Sadly, though, there have been many middle and upper-income families with previously good credit and a fair amount of cash to invest who were new to real estate investing. Many of their dreams of likewise profiting from this economy quickly turned to nightmares and fears of losing all that money as these investment home prices plummet. Rather than take the risk of suffering sizable losses in a declining housing market, many investors have stopped paying their loans and simply turned their properties over to the bank to be auctioned off.
One of the greatest problems is for the investor who is in a position to refinance or sell, but the house prices have fallen below their outstanding loan balance. That is one of the most difficult positions to be in. We are seeing housing continue toward a recession and it is being reflected in prices. The rise in foreclosure is far from exclusively a sub-prime problem that is limited only to areas where incomes are low and the economy is hurting. It is also becoming a considerable problem in the more wealthy states where real estate itself was the major force driving economic growth.
Just because you were not one of those investor-speculators, don’t think it doesn’t affect you. Many of us will pay a price as investors walk away from their properties. People with homes in major metropolitan cities, resorts, golf communities and coastal areas who have been hit by high rates of foreclosures will see their home values depreciate as houses are auctioned off at frightening low prices, well below the prices they saw during the height of the housing boom.
Delinquency and foreclosure rates in the Northeast are now on the rise as well. The surge in foreclosures primarily seen in the sun-belt states are now being seen across many markets. Signs indicate that the trend is starting to especially hit condo prices, with regular housing following close behind.