The Real Estate Weblog

According to Inman News features at inman

the Share of empty houses has hit an all-time high.

The Census Bureau has stated that the largest rise in vacancies is currently being seen in the larger urban areas. All the while, the home-ownership rate has hit a high of just inder seventy percent in the 2nd & 4th quarters of 2004, while broadly speaking the first-quarter 2007 rate was about even with the 68.5 percent rate in the 1st-quarter 2006 while falling from 68.9 percent in the 4th-quarter of last year.

Meanwhile, The rental vacancy ratio was some 10.1 percent in the first quarter, up from 9 and a half percent in the first-quarter 2007. This rate has risen for 4  straight quarters,

as a matter of fact. The Inman real estate news weblog has reported also that such a particulaly high home vacancy ratio could mean a great deal of speculative activity and an over-saturation of rental units out on the open market. The question, what will the trand be going into the end of 2007? Only time will tell.

According to an April 17 article by Marcy Gordon of the Associated Press that was also reported in yahoo news, Federal bank regulators have called upon lenders generally to work with the many troubled borrowers who are having a difficult time with their mortgage payments.
As everyone know knows all too well, delinquencies & foreclosures have been sharply increasing recently, particularly for those many individuals who took out the risky subprime loans. This distress has roiled financial markets and increased worries that it could spill over into the larger national economy.
The various proposals for subprime loans of government-sponsored Fannie Mae & Freddie Mac, the largest single buyers of mortgages in the nation, were disclosed by their top executives at a hearing by the House Financial Services Committee.
This is an interesting story, I will be watching to see how this one will unfold. 

In a St.Petersburg Times editorial entitled ‘The Real estate slowdown is coming home across area’,
journalist CHUIN-WEI YAP stated in his April 16, 2007 article that, sadly, sales are still down and the glut of unsold homes is way up, which is contradicting the optimists who predicted that the market would turn around by the spring 2007.

Only 2 years ago, 1 in 2 homes sold in any particular month. But today, the same period would see 1 in 20 sell.
He also reports that a new vocabulary is emerging in the real estate market, referring to terms such as “short sale,” which means a seller getting less from his home sale than what he owes
 in loans; and “home staging,” which means the art of dressing up a home to look model-pretty just so a buyer might take another look at it.
….”Foreclosures have more than doubled,” states one Linda Pichler, vice president of business development for Consumer Credit Counseling Service of Central Florida.
Let us hope that this recent trend of negative news does not continue for too much longer.

With all the prevelent talk about Sub-prime mortgages and no-money down home loans, it is very important that people do not just take the path of least resistense and grab any loan available.

As journalist and expert Suze Orman recently stated in an article reported in Yahoo Finance (Money matters), regulators are starting to belatedly clamp down on various aggressive lending practices which have been implemented by many fringe lenders in recent years. She goes on to state:  “……..assumptions — pushed by these same aggressive lenders……were that the borrower’s income would increase enough in the intervening years so as to be able to handle these higher payments. Or that the real estate boom would continue unabated, so there would thus be plenty of increase in equity to allow the borrower to refinance out of the loan before the adjustment hit.
Well, that’s not so easy right now, as home price appreciation has stalled in many of the once hottest markets, and not too many people have seen a twenty or thirty % jump in income, which is often what is required as  a minimum for keeping up with rising mortgage payments”.

As we have seen, this line of thinking has been causing many problems in the form of tight budgets at best and foreclosure/bankrupcy at worst. Unfortunately, these negative trends are still on the rise nationally, even in what were considered very solid real estate markets around the country. Colorado and Florida appear to be among the hardest hit right now.

Here is some interesting facts that you may not know about nothing down loans. Some Sub-prime lenders now offer certain
                    financing packages with nothing down. Interest rates are higher
                    on these types of loans, yet they make purchasing a house
                    much easier. And unlike a regular loan, there is no private
                    mortgage insurance which is madatory! There are essentially 2 specific kinds of these 0-down
                    mortgage packages, and each has their own particular requirements.
                  
                  One hundred percent  financing, as the names indicates, offers total financing. The other option, 80/20, finances your mortgage
                    with 2 individual loans. Both loans might be carried by your lender, 
                    yet in some cases the seller or a 2nd lender is needed.
                  100% financing is much easier in general, yet not all lenders
                    will offer this type of loan. 80/20 financing is much more 
                    standard, yet takes some negotiation if the seller happens to be involved in the process.
                 In terms of the qualifications, each particular lender has their own criteria for determining who will
                    qualify for such a nothing-down type of loan. The vast majority of sub-prime lenders mandate that
                    any bankruptcies or foreclosures to have been at least a year old. A conventional loan also mandates these to be discharged
                    two to four years previosuly
                  And while a credit score of 600 or higher is ideal as a very general rule, substantial cash
                    reserves may also serve to qualify you. 6/12 month’s worth
                    of cash reserves are considered the ideal here.
                  If you do decide to go with 80/20 financing with the seller carrying the
                    second mortgage, you may qualify with sub-prime lenders with
                    a score of 560.
                 
                 

In the current down market that we find ourselves in, many individuals are suffering because they decided to go with an ARM or adjustable rate mortgage loan.

The rates have gone up considerable, contributing to the large number of foreclosures. But what is the actual difference between it and a fixed rate loan? Simnn adjustable rate
                  Simply put, an ARM is a loan which is basically set with an interest rate which
                  changes based on a pre-decided criteria and tied to
                  the FED rate. If the interest rates are up, then
                  your interest rate on your loan will likewise be higher, if the interest
                  rates are low then the interest rate on your loan will go down.
                  These Adjustable rate mortgage loans are basically fixed interest
                    rates for a certain period of time and then become adjustable. Broadly
                    speaking the introductory interest rate for an ARM loan will
                    be lower than a fixed rate mortgage. This is done so as
                    to lower the first payments and then permit individuals to take out bigger
                    mortgages, or to simply give them smaller payments for the firstperiod. This is attractive to people who may know that their
                    income will be increasing over that particular period of time.Whether or not to choose an ARM or a fixed rate mortgage
                    has been argued for a very long period of time, as their are core pros and cons of both. Though
                    Basic information may
                    help to ascertain what loan is the best one for you. Some individuals simply aren't
                    comfortable with so much uncertainty so the idea
                    of having an uncertain mortgage payment might
                    cause them more stress than the money they are saving is actually worth.
                    Thus, factor your own comfort level into this decision.</p>
                     As a broad rule of thumb, ARMs are 2, 3 or 5 years, although they
                    could be either longer or shorter. At the expiration of that period your interest
                    rate will become variable unless you then decide to sell your house or refinance the loan altogether.
                    If you think that the likelihood of your selling or refinancing
                    within the period of the ARM is strong, than the lower interest
                    rates of the ARM loan will be of great benefit to you. If
                    you think it is not that likely that you will sell or refinance within
                    that period of time, then you might not benefit from an ARM. This is especially important to consider in light of the current housing market but you should consider other factors also.

hello everyone, I want to welcome everyone to the S.I. Real Estate Portal and Directory’s official Weblog. On this blog you will find informative data concerning real estate news, mortgage rates, FED info., articles and the latest updates to the website.  We will be posting on a variety topics such as the housing market, investment properties,  vacation rentals,  commercial properties and adjustable rate mortgage updates. If you have an article that you believe will be pertinent for the weblog please email us using the contact form located on the main page. We will be updating both the content of the blog regularly with fresh posts and also the outer look so by all means check back with us often.  Thank you for taking the time to read us.