What does "the bottom falling out of the housing market" mean? How long will it take to reach the bottom?
Answers: It means there are many, many, many more sellers than buyers. By one report, there are 100 houses for sale for every single interested buyer. Compound that with rising adjustable interest rates that force people into a must sell situation, because they cannot afford more than the "teaser" rate when they bought, and its a formula for disaster.
When will it end? My crystal ball is in the shop, but the last time I looked it said late 2009 to 2010... then it broke..
Good Luck
This is complicated - but I'll try to answer it. Say you are in a "seller's market".. that is when there are far more interested buyers for real estate (houses) than there are houses available. This can happen when interest rates are low enough that more people can afford to buy a house than would normally be able to, since the cost of financing would be low, as would the monthly payments. But this scenario caused a lot of "flippers" to jump on the bandwagon, since the relative scarcity of available homes was driving the cost of homes upward, ever upward...!
Now suddenly, the "flippers" found that they were getting greedy and grabbing two, three, even four houses at a time to increase their profit margin. But disaster struck when suddenly, people who were buying the houses could not afford to buy them at the new, sky-high rates anymore, so they started backing off. "Flippers" began to panic when they realised they were making monthly mortagage payments on 2, 3, 4 houses that were not appreciating in price anymore, but were actually declining, since suddenly the market had caught up, and turned into a "buyer's market" where the people who were interested in buying homes were greatly out-numbered by the number of available homes for them to buy! So they could pick and choose, which meant that sellers were now forced to compete by cutting their asking price to make the home an attractive purchase. This led to a downward spiral of home prices. This was compounded by the notorious subprime lending fiasco that banks and mortgage companies had created by allowing people with less than stellar credit finance homes by offering them ARM's (Adjustable Rate Mortgages) that had low initial rates, which then suddenly rose as interest rates rose, effectively increasing people's mortgage payments, sometimes even doubling them! This led to even more problems with houses going unwanted for longer and longer periods of time, and people are now walking away from mortgage payments that are greater than the value of the house they are for, since prices have plunged.
This has led to what is otherwise known as the "bottom falling out of the housing market".
As far as when the bottom will e reached, it is extremely hard to predict, since there needs to be some balance between available, affordable (which is key!) housing, and the number of people willing to purchase them. This can range from several months to several years, depending on the economy and the direction it takes over the next few years. A strong economy should lead to a short downturn, but a recession would lead to chaos!
Hope this answers your question? I tried to at least make it as clear as mud. LOL
Keep or supply townhouse within Florida?
Hi everyone!We bought a townhouse in Florida (Zip: 33436) contained by Feb. 2006 for $290,000. Our mortgage is $230,000 (a)5.75 30 years.
We will be relocating to North Carolina in 3 months.
Right immediately the selling prices in our community are between $210,000 and $230,000 for comparable townhomes.
That would suggest if we sell we'd kind big times loss!
So we thought about renting out for the subsequent couple of years.
We could probably get close to $1,250 to $1,500 if we rent it. Maintaining the townhouse is about $2,000 a month, that scheme we'd have to throw money surrounded by every month.
Our incomes are decent so we would know how to afford to maintain the home contained by Florida and to buy in North Carolina.
So what should we do? Take the hit immediately from the home in Florida. Or Keep the Florida home, put money surrounded by it and keep as longterm investment.
All answers and opinion are appreciated.
Thank you.
Answers: I say lately get rid of it. You will rob a loss now or over the 2 yr span. Just dream up $2000x2 yrs?I know you will be renting it ,but ditch it ,renting is a huge PAIN!
Depending on where contained by FL you might have a outstandingly difficult time selling. I have to agree near the poster who said you need to consider the carrying cost vs. selling for a loss. $48K over 2 years is seriously of money.
We put an extend on our first house. Waiting for answer?
We put an offer on our first house on Thursday. We are waiting for the guard involved to answer us. The realtor said she got an email on Friday stating that the sponsor had not however spoken with his attorney.Now it's Monday and we still haven't hear anything. Realtor says that perchance he's still waiting for word from the attorney. My question is this: why would he entail to speak with the attorney past rejecting/accepting the offer?
The sandbank has not foreclosed on the home, but we be told that the owner would sign off on the house. All treatise work is done with the owner's nickname and the bank's name as the seller. The realtor stated that maybe the sponsor is just checking the authority of the paperwork before entering dialogue with us.
Does this nouns right? Again...why does a banker involve a lawyer past answering an offer?
Answers: Because bank are very peculiar. Don't be suprised if they counter using impossible to tell apart info but on their "approved" forms. They do TONS of sales and they hold their own, CYA format of doing things.
Yes, very adjectives.
If an attorney has to approve the transaction, later it IS IN FORECLOSURE.
I don't care what the Realtor said.
The attorney is most possible the named Trustee on the mortgage explanation, and once that happens, the Trustee controls everything on the subject of the sale and have to approve the offer to purchase if one comes within before it go to auction.
The bank have given the Trustee that authority and that is what they are paying him to do.
.and your Realtor is also hand you a line of pure BS.
Is this Realtor representing YOU AND ONLY YOU or do they hold the property listed?
If you don't enjoy a Realtor represeting you and only you, later it's no wonder you aren't getting the real story.
It sounds approaching you are making an offer on a "short sale". You might bring back a great deal but in that will be a lot of red video and delays. If you are unawares for those delays later find another house.
A short sale is a Dutch auction where the owner of the house can not put on the market the home for enough money to pay cheque off the mortgage loan, so the go and get the mortgage company to agree to a compromise and take a lower amount as the complete payoff. In this satchel the mortgage company wants to check and see if the peddler has bread or other assets that can be used to help or if in that was any fraud involved when the street trader made the original mortgage. (they also want to know if you are related to the purveyor in any way---maybe he is selling it to a brother-in-law).
The dune would always involve a legal representative in this features of deal, so that is to say one big reason I suspect this is a short public sale. Again this can be a great buy but it can also delay everything.
Buying homes where on earth lenders, loss mitigation departments, and attorneys are involved will be a true test of your self-control.
Unfortunately, it sounds right and happens far too regularly.
It sounds like a liquidation and a short sale are going on here. Don't verbs that you haven't heard anything, it might be days or weeks past you receive a response.