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.'
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