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Real Estate Turn Around
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Real Estate Investment - Invest The Right Way
Real estate investment is going through its best period ever. Many real estate investors are seeking old run down and neglected properties, giving them a face lift and reselling these properties for huge profits.
This type of real estate investment is more the experienced investor rather than a new comer as it requires certain amount of knowledge about finding the right property, redoin... Read real estate article
Percentage Leases - Real Estate Investing
Multiple tenant commercial real estate buildings that house retail shops or shopping malls are usually leased to the different tenants. They operate several diverse businesses under the same roof using a percentage lease. In a percentage lease, the owner is paid a base rent plus a percentage of the tenant's gross receipts. The rent is determined by the amount of business done by the lessee. This t... Read real estate article
Real Estate Turn Around
The current real estate market slowdown is unique because it was not precipitated by any major economic event. Unlike past market downturns which were brought about by events such as large job losses and business downturns. In fact, the current economic situation is really quite good:
1) Interest rates are dropping and are under 6.5%
2) Fuel prices are dropping
3) The stock market is going up and is threatening to break to break 12,000
4) The employment outlook is good.
So why is it that there are large numbers of houses on the market and 21% fewer homes have sold in New Hampshire this year compared to 2005?
This market is one which is driven by negative news, a bad perception and self fulfilling prophecy. (sounds like a movie ad) Three years ago the news media began calling for the market bubble to burst. But home prices continued to climb and buyers continued to buy. As time went by the "Bubble Bursting" stories came more frequently, weighing on buyers minds. Of course it was easy to believe there would be a dramatic end to the market since we experienced a stock market downturn in 2001 after a very hot market. But the frenzied buying continued.
The run up in home prices in New Hampshire made the purchase of a home very difficult for most buyers and especially for first time buyers. This made the market very sensitive to any changes in the cost of a home. In 2005 three events occurred that gave buyers a reason to pause.
Interest rates began to creep up
In September 2005, fuel prices spiked to over $3.00 per gallon.
And of course there was that fear of a bursting bubble the news media "predicted"
The increasing interest rates made an already difficult to afford home even more expensive to purchase and the rising fuel prices in September threatened to make heating a new home prohibitively expensive. The small slow down in buying late last year reinforced the news media's premonition, and buyers believed the market was at the end of its run up. Interest rates continued to climb, taking more buyers out of the market and the market slowed still further. This left the housing market with larger than normal inventory and more frequent price reductions.
Over the past year the market has corrected itself. Home prices have fallen, fuel prices have fallen and interest rates have fallen. In other words, homes have become more affordable. So why are buyers not buying? There are certainly buyers who want homes and who are in a position to buy. I do not think that there is any lack of demand, there are many who want to buy a home. Buyers are waiting to see a market bottom. My guess is that as long as buyers believe that prices will continue to fall they will not be motivated to buy.
As stated earlier, part of the problem is that homes have become too expensive. But I do not feel that this factor alone is what has precipitated the downturn. If home affordability were the sole problem I would expect to see people spending less for homes. This would be seen as a drop in the average selling price of houses in the area. In fact, the average selling price of a home is up in Q3 2006 over the same quarter in 2005. Home prices are clearly down, demonstrated by the average price per square foot of homes sold which after 6 years of steady increases have dropped in 2006. This tells me that during this market downturn buyers are taking advantage and buying more house for the money. They are not spending less, but buying larger or more nicely appointed homes. Not something one would do if affordability were the problem.
An event is needed for this market to turn around; prices must stop dropping or perhaps interest rates increasing. At this point there is no reason not to buy a home given the current market conditions.
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Find the Best Lender
Shopping around for a new home can be a long and tiresome process. Between overpriced housing markets and potential bidding wars, it is easy for a home buyer to become frustrated. However, the process of finding a good mortgage lender should not be stressful. Choosing a good lender is critical. For this reason, home buyers must avoid rushing the process or making haste decisions. If buying a home in Alabama, buyers should consider three factors when selecting a mortgage lender. Consider the following helpful tips for locating a reputable and trustworthy home loan lender.
Home Loan Lender's Reputation
When applying for a home loan, buyers have many different lenders at their disposal. They may choose to apply for a loan with their personal bank, credit union, or use a mortgage company. Regardless of method, the lender chosen must have a good reputation. According to Alabama's Fair Housing Act, mortgage lenders cannot refuse a loan application because of a person's race, nationality, gender, or religion. On the other hand, some agents will discourage the seller from accepting bids or offers from buyers who have been pre-approved by an unknown or shady lender. Before choosing a mortgage lender, do your research. Contact the Alabama Better Business Bureau and inquire about complaints. If possible, choose a lender by referral
Online Home Mortgage Brokers
Another effective method for choosing a good lender is to submit an application with a mortgage broker. In a nutshell, brokers are middlemen. They do not lend money. Rather, they match home buyers with lenders and home loan programs. Because brokers have access to a wide assortment of loan programs, this is perfect for first time homebuyers, bad credit applicants, etc. Do you need down payment or closing costs assistance? Did you experience a bankruptcy or foreclose? If so, a mortgage broker can help.
Compare Mortgage Rates from Different Lenders
Currently, Alabama home mortgage rates are slightly higher than the national average. With this said, it is important to obtain mortgage rates from more than one lender, and make a thorough comparison. Many homebuyers mistakenly apply with a single lender, and accept their quote without shopping around. In some instances, this results in paying more for a loan. Fraudulent mortgage lenders earn a huge profit by charging unreasonably high rates. To avoid dishonest practices, get quotes from at least three lenders.
Visit Alabama Lending Hub for a list of Alabama Recommended Home Mortgage Lenders, whether you are looking for home purchase, refinance or a home equity loan.
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