Now, here we are sounding all giddy in the face of massive global uncertainty. We are firmly in the belief that in every challenge there are opportunities. It follows that during this era we have had major challenges and therefore we have major opportunities as well. What are these opportunities? We have lower prices for gas, lower interest rates, lower housing prices and even cheaper stock prices. We have spoken extensively about the opportunities in real estate that exist in this environment. Lower prices and lower rates have made homes the most affordable in a generation. And don’t think that opportunists are not taking notice. There are a record percentage of homes that are being sold to investors with cash. Those who are wealthy take advantage of opportunities because they have the money.
It is not just about real estate. Lower rates will help car sales as well. Unlike houses, cars usually need to be replaced every five to ten years. The slower pace of car sales throughout the recession and slower recovery will mean that there will be massive demand at the back end of this cycle as we move to replace our aging cars. Lower rates and lower gas prices all will end as the latent demand for housing, cars and other big-ticket purchases arise. Will this happen next month or twelve months down the road? We don’t know. There are still strong headwinds suppressing consumer behavior and company hiring. However, as we have pointed out there is even a silver lining with regard to the employment situation. Companies have been hoarding cash. Therefore, when the time is right they will have the resources to hire. Any spark of excitement could turn into a fire more quickly than the analysts are predicting. Hopefully we will see at least a glimpse of this spark in the employment statistics being released this week.
REAL ESTATE NEWS:
Fortunate enough to take advantage of todays beaten down home prices and record-low interest rates, some baby boomers are buying their dream retirement homes — years before leaving the workforce. “We’re seeing people purchasing homes five, six, seven years or more ahead of retirement,” said William Filbin, a Re/Max broker in Marco Island, Fla. It’s an opportunity that’s hard to resist: Home prices nationwide are down 32% from their mid-2006 peak, according to the S&P/Case-Shiller home price index. Meanwhile, rates are at historic lows with the 30-year fixed-rate hovering around 4.2%. The question is: What to do with the property when you have so many years to kill before retirement? To help cover the expenses of an extra loan and other bills — like utilities and property taxes — some pre-retirees are renting their homes out on long-term leases; others who bought in vacation hot spots rent to vacationers, said Mike Sannes, a Keller Williams broker with Big Bear Real Estate in San Bernardino County, Calif. Source: CNN/Money
The growing Latino population will significantly impact lending in the United States, said Rogelio Sáenz, dean of the College of Public Policy at the University of Texas at San Antonio. While presenting at the 6th Annual Mortgage Lending Industry Strategic Markets and Diversity Conference, Sáenz based his assertion on demographic trends, citing numbers which show one out of every two people added to the U.S. population each year is Latino. Sáenz said the Latino population could easily triple from 49.7 million in 2010 to 132.8 million by 2050, significantly shifting the makeup of the nation’s homebuyers. Sáenz cited data from the National Association of Hispanic Real Estate Professionals, which suggests Hispanics are now the largest minority group and a significant portion of the age group that is most often involved in home sales — mainly those who are 26 to 46 years old. He added the growing Hispanic population is more likely to have families with children, spurring the need for homeownership. Mark Calabria, director of financial regulation studies at the Cato Institute, has studied home lending issues in the United States and agrees that the Latino share of the housing market is growing, Calabria said in an interview with HousingWire. Source: HousingWire
Writing a home purchase contract is crucial. Otherwise, it can easily derail a deal. Here are some common contract mistakes:
Buyers don’t secure financing by deadline. Many contracts are contingent upon the buyer securing financing by a particular date. However, in today’s tight lending environment, you’ll want to ensure you allow extra time for buyers to get home loan approval. Otherwise, sellers may terminate the contract altogether and even keep the earnest money deposit if a buyer doesn’t meet the deadline in getting financing. Be realistic about your closing date and don’t try to close too quickly, Patti Lawton, a broker with Welcome Home Realty in Brunswick, Maine, told Bankrate.com. “There are a lot of things that need to be done properly, and you must give lenders, title companies, and others time,” Lawton says.
Not being clear on what stays with the house. Clearly state in the contract what stays with the home. You don’t want buyers to walk into their new home after closing to unexpectedly find the chandeliers missing.
Missing signatures. “Sometimes the home is owned by both spouses, other owners or an entity such as corporation,” says lawyer Jeff Marks, a partner with Ryan and Marks Attorneys LLP in Jacksonville, Fla. “Make sure all of the parties sign the contract. If a party to the transaction fails to sign, they’re not bound to perform the contract.” Source: Bankrate.com