I took some time off to squeeze in a vacation and then play catch up. Vacations are great. You need to recharge yourself and spend time with the family. I must say that this vacation was more like work than a vacation. It was the first time we ever went to Disney World. You have to be in marathon shape to see everything. We tried...5 parks in 5 days. Next time, we'll know...Slow it down and only do a couple parks. There is too much to see in this area.
Anyways, back on the home front. The inventory still on a small climb. The house prices are still on a climb but nothing like we had last year or prior. I am seeing about a 5% appreciation over last year. Some homes from 2000 to 2005 experienced 60-90% appreciation. Great investment!!! But now at what cost? I was just having a conversation with a friend the other day about the market...(you know being in Real Estate, its unavoidable) We started talking about the interest rates and loan programs that all these buyers used to get into these homes. My opinion to him was, we will start see some foreclosures in the next 6-18 months. Why...my thoughts (THIS IS ONLY MY OPINION) that some of the Interest Only loans and Adjustable Rate Mortgages (ARMs) will be expiring or closing in on the first step rate increase. If they have not made arrangements to refinance or sell prior to this they are looking at substantial increase in payments. Example; 5/1 ARM @ 5% on a $400,000 loan and annual taxes $3,000 is $2,072. 30 yr fixed @ 6.5% is $2,828 (there are other variables to consider but you get the idea) Unfortunately, some did not plan for this. I always said that Interest Only Loans are great if you use them wisely. We no longer hold on to homes like our parents. This generation moves on average 3-7 years. So no more Promissary Note burning in the back yard when dad finally made the last payment on the house. So, while we move more often, why pay higher mortgage payments? Unless you are doubling up on payments, you are not making a major impact on your principal for the first few years. But finance wisely... know your options and what you can afford in worse case scenarios. GMA had a little blurb this morning about this...it seems that Texas and New Jersey are starting to show signs of foreclosures. Their predictions were in line with my thoughts...wow... I'm physic!
Total Homes 1,572
New in the last 2 days 52
Under Contract last 7 days 90
Average Days on Market 65 (some areas are better, some are worse)
No comments:
Post a Comment