Archive for the 'Real Estate Investing' Category

It’s no secret that the real estate market in the United States has been headed downhill for quite some time. While the problem can’t be pinned on any specific event or person in the past, it is easy to decipher how the housing bubble expanded and then collapsed again so quickly during the past ten years.

During the last years of Alan Greenspan’s tenure as chairman of the Federal Reserve, he made the decision to cut the federal interest rate several times. With banks and financial institutions owing less to the federal government as a result, the interest rates for homebuyers and real estate investor mortgages came down as well. This encouraged a huge surge in home buying throughout the country. Banks also catered to this growing trend by offering new, low cost adjustable rate mortgages. Later, these became known as sub prime mortgages, as they were marketed to buyers with bad credit and little or no money available to put towards a down payment.

The housing market began to inflate at an alarming rate, as the country went real estate crazy. Homes everywhere were being bought up at extraordinary rates and for higher and higher prices. Inflated home values only encouraged the banks and lending institutions to sell more mortgages. This also caused a huge increase in land and real estate development, especially in up and coming tourist areas such as South Florida, the California Coast, and other areas experiencing significant population and wealth growth.

However, sure enough foreclosures began to take root as people were unable to keep up with their mortgage loans. Then the housing market began to slow down. Home sales slowed, and suddenly the market was flooded with new developments and newly built homes that were simply sitting on the market unsold, depreciating in value. Then home prices began to fall back to earth rapidly, well below the inflated values they had been selling for merely months earlier. Investors and homeowners alike began to lose lots of money, as the properties they bought could no longer be sold off to even break even.

Historically, a fall in the real estate market has always been signifier of a coming downturn in the economy, and it seems that this has begun to come true. The Nasdaq and the NYSE have both fallen into significant slumps as of late. Many are predicting an upcoming recession, and in 2008, once again record foreclosures are expected as home prices continue to fall, the economy slows down and people everywhere cannot afford to keep up with their expensive, overpriced and unmanageable mortgages.

It’s a tough time for real estate investors, but there are some bright spots, and ironically, one of the brightest lies in the foreclosure market itself. Since foreclosure homes are coming on to the market and being sold in record numbers, this market too is completely flooded. Foreclosures, traditionally undersold at auction in the first place, are going for incredibly low prices, simply so that banks and lenders can earn something back on them. And the quality of homes on the foreclosure market is at the highest it’s been in years as well.

Since so many investors bought up high priced real estate during the boom and then could not sell it, it eventually became cheaper for them to let the home go into foreclosure than to keep up with the outrageous monthly payments on their ARM. Therefore, all kinds of great properties in desirable locations have become available foreclosures. Buying up these homes as a family residence is a great idea, since you’ll get incredible values unlike at any other time in recent history. They can even be good for investors, provided you can sit on them and wait for the market to come around again.

Foreclosures are worth keeping an eye on, so watch for deals in your area.

As more and more abandoned homes begin to crop up in urban areas across America, Mayors and city officials are becoming acutely aware of the problems that foreclosure homes are raising in their cities. With 2007 experiencing new highs in the nationwide foreclosure homes rate and experts predicting even more new foreclosure homes to come onto the market in 2008, municipal authorities are bracing themselves for the economic and social impacts that these new foreclosures will have on their cities.

Foreclosure homes were one of the hot topics of discussion at the annual U.S. Conference of Mayors that wrapped up last week. One of the biggest issues was that the rampant rate for foreclosures, which is as high as 1 in every 50 homes in some urban areas like Miami, Detroit and Cleveland, is going to lead to much lower home values. While this trend has already occurred due to a flooded market, foreclosure homes and abandoned houses, especially in dense urban areas, are notorious for bringing down market value on homes all over.

2007 already saw the steepest decline in median home value properties nationwide in 27 years. And with more adjustable rate mortgages ready to reset and no solutions in sight for bucking the upward trend in foreclosures, property values, especially in urban areas, are primed to fall much lower as the foreclosure homes inventory increases.

One of the problems that foreclosure homes and low property values raise for cities is lower property tax revenue, and that means budget cutbacks. With less people paying their property taxes, and with low property values dragging property tax values down, this results in a severely decreased allocation of money for basic city services, including the ones needed to handle to additional strain abandoned homes and foreclosure homes put on cities. Abandoned houses in low income areas have long been linked to increases in crime, but with less money to work with, cities can’t adjust their police force tactics accordingly.

Chicago city officials estimate that abandoned foreclosure homes cost the city $34,000 each every year in inspections, court actions, increased policing, city utilities and even demolition.

City officials are now taking steps to work with local banks and lenders, who they feel are responsible for much of the economic crush bearing down on the cities. An estimated 50% of homeowners who face foreclosure never even speak with their lender before their properties become foreclosure homes, and cities like Chicago are seeking to change that. The city of Baltimore has gone so far as to sue Wells Fargo over what it considers to be unfair lending practices. Officials seem to be united in emphasizing that banks and lenders play as much a part in local urban communities as the Mayor’s office, and that their responsibility is to help combat the rise of foreclosure homes.

Foreclosure homes investment is one way for the problem to begin to right itself, as is the buy up of surplus property on the rest of the market. But with so many new foreclosure homes coming onto the market every week, it seems that property values and foreclosure homes sale prices are destined to fall even further, creating a problem that is going to be extremely hard for many city government to keep up with.

Despite predictions that the Manhattan real estate will slow down and follow the rest of the country’s slumping market, last year actually showed a rise in average home prices. Real estate experts believe that there are actually three reasons for New York real estate market’s good performance.

Low Inventory

The current housing market shows a surprisingly low inventory of New York properties. With such a low supply, many sellers are receiving multiple offers and enjoying a nice profit.

Wealthy Buyers

Last year, many wealthy buyers bought extraordinarily expensive apartments and condos, fueling the increase in property value. A large number of buyers with deep pockets, who are looking to invest in one of these Manhattan properties, still remains and could keep the market relatively hot for a couple more months.

Economic Situation

Wall Street workers have yet to feel the effects of the looming recession and buyer confidence was quite high. Year end bonuses were still good and financial workers invested most of their money in real estate.

Of course, signs of a sober market can be felt as early as now. The same workers may receive leaner bonuses for this year driving the demand down; borrowers will have to struggle with stricter lending regulations; and foreign buyers might think twice about the potential return of these New York properties.

The subprime mortgage market crisis is also a factor that could drive the nation to a recession. Millions of mortgages have gone into default, leaving lending institutions with no choice but to declare bankruptcy and the market brimming with foreclosed homes for sale. Predatory lending practices during the most recent housing boom is said to be the culprit behind the foreclosure crisis. With a large inventory of foreclosure homes, new developments and existing home sales are dramatically affected.

Foreclosure Listings is a one-stop resource of real estate news, advice and tips as well as listings of foreclosures for sale all over the nation.

Start your Search:

• New York Bank Foreclosures
• Hempstead Bank Foreclosures
• Brookhaven Bank Foreclosures
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• New York Cities
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Real estate investing is a growing business and more and more people are taking the dive just to make some quick profits. But the truth is that you can’t make any quick profits. The only way to make profit in real estate investing is through a calculative and strategy oriented method. There are different types of real estate that you can invest in. First you need to identify whether you want to invest in commercial property or residential property. Once you have done that, you need to identify if you have deep financial pockets to buy real estate property at the current market price or not.

For many people real estate investing may look like a tough deal while for others, it may seem just like another walk in the park. The truth is that real estate investing is neither. There are different types of real estate properties that you can invest in but the best and the safest bet would be bank foreclosures. The question is how do you go about it?

Seasoned real estate investors have always explored ways to earn considerable profit off bank foreclosure properties. Aside from buying foreclosed homes at pre-foreclosure stage, from auctions or from banks (real estate owned), they can also own one under a short sale agreement.

Foreclosures are rising fast, investors are sweating, and lenders are now bending over backwards to keep bad loans alive. Boy how things have changed.
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For the past five years, the housing bulls have been trotting out one rational-sounding argument after another to explain why the boom made perfect economic sense.
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