Home Prices are Predicted to Fall
A housing slump is eminent, with the National Association of Realtors predicting the first ever year-over-year median home price decline for existing homes in the nearly 40 years they've been tracking the metric. The debate is now over, and the results are in: Millions of Americans will lose their homes to foreclosure in the next few years...need proof? Just take a look at Yahoo and Google's brand new foreclosure search engines.
Help is on the Way...But is it Enough?
The new Democratic congress is scrambling to get ahead of this looming catastrophe, trying to assemble millions of dollars in funding to assist the at-risk borrowers who will be largely affected by the upcoming crisis. Additionally, the Neighborhood Assistance Corporation of America (NACA)--which many of you know of--is prepared to help up to 10,000 borrowers refinance their delinquent loans. As altruistic as their intentions are, NACA (and I'll even say our Democratic congress) cannot prevent the impending housing bust that will almost certainly devastate the U.S. economy over the next 5 years.
Where Do You Fit In?
If you are a future home buyer, then you will certainly reap the benefits of lower home prices and a wider availability of properties for sale during the coming years. Moreover, you will surely celebrate the day you sign the deed to the largest purchase of your lifetime.
At the same time, do not forget that this current wave of foreclosures will come largely from homeowners who are low-income, minority, and/or first-time buyers. Bankers and mortgage companies have led millions of higher-credit-risk ("sub prime") borrowers into (I) fantasies of unrealistic real estate appreciation projections, (II) inappropriate, high-risk mortgage products, (III) homes that were out of the buyer's price range from the beginning, or (IV) all of the above. Remember that real estate, like the stock market, is a zero sum game. For every buyer, there's a seller...and for every great deal on a purchase, there must also be a great loss on a sale.
A housing slump is eminent, with the National Association of Realtors predicting the first ever year-over-year median home price decline for existing homes in the nearly 40 years they've been tracking the metric. The debate is now over, and the results are in: Millions of Americans will lose their homes to foreclosure in the next few years...need proof? Just take a look at Yahoo and Google's brand new foreclosure search engines.
Help is on the Way...But is it Enough?
The new Democratic congress is scrambling to get ahead of this looming catastrophe, trying to assemble millions of dollars in funding to assist the at-risk borrowers who will be largely affected by the upcoming crisis. Additionally, the Neighborhood Assistance Corporation of America (NACA)--which many of you know of--is prepared to help up to 10,000 borrowers refinance their delinquent loans. As altruistic as their intentions are, NACA (and I'll even say our Democratic congress) cannot prevent the impending housing bust that will almost certainly devastate the U.S. economy over the next 5 years.
Where Do You Fit In?
If you are a future home buyer, then you will certainly reap the benefits of lower home prices and a wider availability of properties for sale during the coming years. Moreover, you will surely celebrate the day you sign the deed to the largest purchase of your lifetime.
At the same time, do not forget that this current wave of foreclosures will come largely from homeowners who are low-income, minority, and/or first-time buyers. Bankers and mortgage companies have led millions of higher-credit-risk ("sub prime") borrowers into (I) fantasies of unrealistic real estate appreciation projections, (II) inappropriate, high-risk mortgage products, (III) homes that were out of the buyer's price range from the beginning, or (IV) all of the above. Remember that real estate, like the stock market, is a zero sum game. For every buyer, there's a seller...and for every great deal on a purchase, there must also be a great loss on a sale.
Labels: Family/Home