Happy New Year everyone! This morning I told someone 'happy new year" and they replied 2009 just can't get here fast enough... That seems to be the feeling a lot of people have right now. So, here's to a better next year that this one has been.
That brings me to the current real estate market here in what is currently a very cold and snowy Cochise County Arizona. Well, like most places, our market has been slow. Many buyers are having trouble getting loans and many others are backing out of deals because their previous one fell through. Sounds pretty bad, right? Not really.
While certainly banks have instituted much more stringent criteria for loans, qualified buyers are still getting the loans they need. That's actually a good thing. As many long-time professionals in the real estate industry did, I cringed when lending criteria became so lax anyone with a pulse could get a mortgage. Often multiple mortgages at the same time. All of this lead to an eventual "feeding frenzy" in real estate...over buying...over building...over leveraging.
Even when rational real estate professionals were cautioning investors about buying too much or leveraging too much more and more people were "jumping on the bus." As is usually the case with any market, once this happens it's only a matter of time until the party's over. In short, this is what happened in real estate in 2008.
Of course, hind-sight is always 20-20 and it's easy to look back and see where we all went wrong. So, what do we do now?
No question there are a lot of great deals in real estate right now. Locally, we're seeing prices on land we haven't seen in many years as sellers who bit off more than they could chew are now desperate to unload properties at just about any price - even if they have to take a loss. We also have an increase in sellers willing to carry the note on the property themselves in order to make a sale.
Personally, I think that as people realize real estate prices won't fall forever, just as they couldn't rise forever, we'll have more buyers coming back to the table. Plus with interest rates on mortgages falling again more people will again qualify for mortgages.
As I've said before, real estate, just like any other market, is cyclical in nature. All markets rise and fall. Yes this has been a fairly disastrous fall we've experienced, but the rise was also dramatic, fed by greed and a lack of oversight on the part of banks making loans to people that never should have gotten them. So, while it will undoutably take longer than the normal cyclical change for us to return to a normal market, it will happen.
My advise is if you're thinking about buying real estate right now, go ahead and take a look around. You'll find some tremendous deals, very flexible sellers, and perhaps even a bank willing to make a loan.
So, Happy New Year Everyone! Let's make 2009 a great one!
Thanks for reading.
Kellie Fitzgerald
cell 520-507-1027
Saturday, December 27, 2008
Tuesday, November 11, 2008
So have we hit the bottom yet?
This seems to be the question of the day. Everyone wants to know when it's safe to "get back into the water" with real estate. Problem is, no one really has the answer to this question.
Real estate has been and always will be all about location, location, location. So, even though many parts of the country (and world for that matter) still have dismally slow or even nonexistent real estate markets right now, there are parts of the country where things do seem to be picking up a bit. And, everywhere, there are tremendous deals to be had. So, even though everyone seems to want to get in at the bottom of the market, just like the stock market, no one can every really be sure we're at the bottom until we start coming back up.
I suppose the bottom line is now exactly the same as it has always been...if you find a great property that you really like and you can afford it or arrange affordable financing for it and it is at a good price...buy it.
One good thing that is happening in many real estate markets across the country is the return of seller financing, also known as owner carry-back financing. For people who are either lacking stellar credit or lots of money to put down, this can really be a terrific thing. The downside is that the interest rates are generally a bit higher than you could get at a bank and the terms are normally a bit shorter as well. However, the upside is that many people can buy property they otherwise could not purchase and the seller can sell a property that they otherwise may not have been able to sell.
This type of financing is more plentiful with vacant land, however, we're seeing it more often with manufactured homes and even site-built single family residences. So, even if the listing does not specify that the owner will be willing to do this type of arrangement, it's worth asking. All they can do is say 'no' and they might just say 'yes.'
Real estate has been and always will be all about location, location, location. So, even though many parts of the country (and world for that matter) still have dismally slow or even nonexistent real estate markets right now, there are parts of the country where things do seem to be picking up a bit. And, everywhere, there are tremendous deals to be had. So, even though everyone seems to want to get in at the bottom of the market, just like the stock market, no one can every really be sure we're at the bottom until we start coming back up.
I suppose the bottom line is now exactly the same as it has always been...if you find a great property that you really like and you can afford it or arrange affordable financing for it and it is at a good price...buy it.
One good thing that is happening in many real estate markets across the country is the return of seller financing, also known as owner carry-back financing. For people who are either lacking stellar credit or lots of money to put down, this can really be a terrific thing. The downside is that the interest rates are generally a bit higher than you could get at a bank and the terms are normally a bit shorter as well. However, the upside is that many people can buy property they otherwise could not purchase and the seller can sell a property that they otherwise may not have been able to sell.
This type of financing is more plentiful with vacant land, however, we're seeing it more often with manufactured homes and even site-built single family residences. So, even if the listing does not specify that the owner will be willing to do this type of arrangement, it's worth asking. All they can do is say 'no' and they might just say 'yes.'
Friday, October 19, 2007
Investing in Land
OK, so I've received a call from someone in another state who purchased land, sight unseen, and now, after the fact, wants to know what it's worth. First off, unless you are a successful, experienced investor who has established a relationship with a trustworthy, experienced real estate professional in the area you want to buy land - don't do it. You absolutely need a professional you can trust to go take a look at the property, evaluate that area's market condition and the market potential of your prospective purchase - before you make any purchase.
After you've already bought the property is not the time to call around and see what it's worth. In this specific case, this person purchased a .82 acre lot for around $19,000.00 in an area where lots the same size and in better areas are now selling for $5,000. Not a good thing. At all. The real "kicker" is that in this particular area you actually need at least two of those lots in order to build anything due to state and county regulations pertaining to the location of a septic system (which this property requires) and a well (which this property also requires).
Not to mention that in this area there are many larger parcels of property that can be had for the same $19,000 this person paid for a "football field sized lot". In fact, many people routinely come into the Sulphur Springs Valley and purchase raw land, divide it or maybe make an improvement or two, then turn around and sell it. This valley is full of investment opportunities for people who want to buy and sell land. In many cases, if you develope a good working relationship with the right real estate professional, you do not even have to make any improvements at all - the right professional can find you those really good deals that make you the most profit.
But, that's the key. If you are looking for a real estate investment, especially land, you really do need a real estate professional who can look out for your best interest, this does require spending the time to find that right professional you can work well with, who understands what you are really trying to do, and has the experience and integrity to pull it off.
Don't make the mistake of thinking "any" real estate agent will do the same job - that's like saying "any" doctor can perform brain surgery. That old addage, "the right tool for the right job" can be applied here. If you're thinking about investing in land, your first piece of homework should be to find the right area. Immediately after you've decided where you want to focus, find that qualified, hard-working real estate professional you want to put your trust in - then do what they advise you to do. They are worth their weight in gold and will make you a lot of money over the long run.
Real Estate Blogs Directory
- Directory of real estate blogs and blogs of industries affiliated with and
serving the real estate industry.
After you've already bought the property is not the time to call around and see what it's worth. In this specific case, this person purchased a .82 acre lot for around $19,000.00 in an area where lots the same size and in better areas are now selling for $5,000. Not a good thing. At all. The real "kicker" is that in this particular area you actually need at least two of those lots in order to build anything due to state and county regulations pertaining to the location of a septic system (which this property requires) and a well (which this property also requires).
Not to mention that in this area there are many larger parcels of property that can be had for the same $19,000 this person paid for a "football field sized lot". In fact, many people routinely come into the Sulphur Springs Valley and purchase raw land, divide it or maybe make an improvement or two, then turn around and sell it. This valley is full of investment opportunities for people who want to buy and sell land. In many cases, if you develope a good working relationship with the right real estate professional, you do not even have to make any improvements at all - the right professional can find you those really good deals that make you the most profit.
But, that's the key. If you are looking for a real estate investment, especially land, you really do need a real estate professional who can look out for your best interest, this does require spending the time to find that right professional you can work well with, who understands what you are really trying to do, and has the experience and integrity to pull it off.
Don't make the mistake of thinking "any" real estate agent will do the same job - that's like saying "any" doctor can perform brain surgery. That old addage, "the right tool for the right job" can be applied here. If you're thinking about investing in land, your first piece of homework should be to find the right area. Immediately after you've decided where you want to focus, find that qualified, hard-working real estate professional you want to put your trust in - then do what they advise you to do. They are worth their weight in gold and will make you a lot of money over the long run.
Real Estate Blogs Directory
- Directory of real estate blogs and blogs of industries affiliated with and
serving the real estate industry.
Thursday, October 18, 2007
What's the deal with real estate?
It seems like everywhere you go someone's talking about the big sub-prime mortgage mess, the real estate market bust and how it's all going to drive the country into recession. The truth is that we're only hearing the gloom n doom side of the story.
It's true that in many parts of the country there was an absolute real estate feeding frenzy, mostly by investors, that drove prices through the stratosphere. It's also true that in those areas many people who had been planning to buy their first home probably felt like it was one of those "now or never" type things - that if they didn't go ahead and buy something prices would get so outrageous they would never be able to buy anything. Then there were the people who wanted a piece of the pie and decided to go out and get mortgage broker and real estate agent licenses to capitalize on the whole thing.
All of this, combined with a healthy dose of greed, created the bubble that has now burst.
But did this happen everywhere? No. Did everyone who purchased a home within the past few years get a sub-prime, adjustable rate mortgage? No. Are all mortgage brokers and real estate agents really inexperienced salespeople just out to make a quick buck? No.
The fact is that in many parts of the country, the real estate market is humming right along, neither in a frenzied pace or a laboriously slow pace. It's pretty much normal. Believe it or not, in many parts of the country today people who purchased their homes within the past year or so are happily raking leaves, baking cookies, taking the kids to their soccer games and making their mortgage payments, not worrying about all the hype about how other peoples' houses are loosing value daily.
Fact is, most real estate professionals are just that - professionals. They are dedicated to providing the best possible service to their clients and plan to stay in their chosen profession for many, many years. Most of them continually take classes in order to stay current on their local issues, law changes and counseling skills. Many of them consider themselves to be more "friend," "advisor," "teacher," and "counselor" than "salesmen." These professionals realize that real estate is really about developing relationships with people - not just selling property.
But that's boring stuff, that's just typical life stuff, no one really wants news about that. So, in order to satisfy the public at large all we hear about is how the "sky is falling."
Now many people in areas that are doing fine are afraid to buy a house or try to sell a house. Many of these people are now afraid that the country will slip into recession and they will loose their jobs, so how can they even think about buying a house?
Aren't we creating that "self-fulfilling prophesy" thing? Isn't this becoming one of those "you are what you think you are" times? Shouldn't someone start being a little more positive?
Any time we make broad generalizations about anything, whether it is targeted at races or religions or financial markets or housing, it is a dangerous thing to do. No one "always" or "never" does anything. Markets, like housing, are cyclical in nature and they will always change. There will always be a seller who is desperate to sell and a buyer who wants to buy - whatever the overall market is like.
Bottom line, if you want to buy a house, and you find the house of your dreams, don't worry about the market, worry about you and what you can afford. If you can afford it, and you want to buy it, go ahead.
Real Estate Blogs Directory
- Directory of real estate blogs and blogs of industries affiliated with and
serving the real estate industry.
It's true that in many parts of the country there was an absolute real estate feeding frenzy, mostly by investors, that drove prices through the stratosphere. It's also true that in those areas many people who had been planning to buy their first home probably felt like it was one of those "now or never" type things - that if they didn't go ahead and buy something prices would get so outrageous they would never be able to buy anything. Then there were the people who wanted a piece of the pie and decided to go out and get mortgage broker and real estate agent licenses to capitalize on the whole thing.
All of this, combined with a healthy dose of greed, created the bubble that has now burst.
But did this happen everywhere? No. Did everyone who purchased a home within the past few years get a sub-prime, adjustable rate mortgage? No. Are all mortgage brokers and real estate agents really inexperienced salespeople just out to make a quick buck? No.
The fact is that in many parts of the country, the real estate market is humming right along, neither in a frenzied pace or a laboriously slow pace. It's pretty much normal. Believe it or not, in many parts of the country today people who purchased their homes within the past year or so are happily raking leaves, baking cookies, taking the kids to their soccer games and making their mortgage payments, not worrying about all the hype about how other peoples' houses are loosing value daily.
Fact is, most real estate professionals are just that - professionals. They are dedicated to providing the best possible service to their clients and plan to stay in their chosen profession for many, many years. Most of them continually take classes in order to stay current on their local issues, law changes and counseling skills. Many of them consider themselves to be more "friend," "advisor," "teacher," and "counselor" than "salesmen." These professionals realize that real estate is really about developing relationships with people - not just selling property.
But that's boring stuff, that's just typical life stuff, no one really wants news about that. So, in order to satisfy the public at large all we hear about is how the "sky is falling."
Now many people in areas that are doing fine are afraid to buy a house or try to sell a house. Many of these people are now afraid that the country will slip into recession and they will loose their jobs, so how can they even think about buying a house?
Aren't we creating that "self-fulfilling prophesy" thing? Isn't this becoming one of those "you are what you think you are" times? Shouldn't someone start being a little more positive?
Any time we make broad generalizations about anything, whether it is targeted at races or religions or financial markets or housing, it is a dangerous thing to do. No one "always" or "never" does anything. Markets, like housing, are cyclical in nature and they will always change. There will always be a seller who is desperate to sell and a buyer who wants to buy - whatever the overall market is like.
Bottom line, if you want to buy a house, and you find the house of your dreams, don't worry about the market, worry about you and what you can afford. If you can afford it, and you want to buy it, go ahead.
Real Estate Blogs Directory
- Directory of real estate blogs and blogs of industries affiliated with and
serving the real estate industry.
Subscribe to:
Posts (Atom)
