Bad news is good for buyers.
If you’ve been reading USA Today this week with an eye on real estate, then you may know that Countrywide Financial plans to restructure or refinance $16 billion in adjustable rate mortgages by the end of the year, according to an Oct 23rd article. Right after that, on the same day, there is an article criticizing the mortgage industry for not doing enough to help homeowners who are in financial crisis and are threatened with losing their homes to foreclosure. (Criticism rains down on mortgage industry.) In the Oct. 25th issue the headlines read “Sept. home sales plunge…And October numbers could be even worse.” According to the National Association of Realtors, sales of existing homes fell 8% from August, which is the steepest dive since the NAR started combining figures for single family homes and condos in 1999.
In the Oct 26th issue we learn that Bank of American is ceasing their wholesale mortgage business to concentrate on direct lending to consumers, resulting in a loss of 700 jobs. It should come as no surprise that shares of Countrywide (mentioned above) fell more than 5% Thursday to $13.07 a share, the lowest in 4 years. And finally, on the upside, new home sales rose unexpectedly by 4.8% in September over August sales, information that was greeted skeptically by analysts as they predict further sales declines. Did I also say that rates on fixed rate mortgages fell to 5.8%, the lowest in 6 weeks?
Fear seems to be everywhere in the market. Numbers are down or up depending on if you are talking about the number of sales that month or foreclosures. Private economists warn that a major housing slump could threaten the overall economy. Every time you turn on the TV, there are more dire predictions about the economy as a whole, and the housing market specifically.
So what does this really mean to you? If you’re a homeowner, who purchased within the last few years with an adjustable rate /and / or interest only loan, I don’t have to explain it to you since you are living the pain of a payment you may not be able to make or of negative amortization. However for you buyers out there, I say it’s good and only getting better. Plunging interest rates, homes in foreclosure, more and more sellers trying to get out from under a mortgage all adds up to one thing, a good time to be a buyer. Your ability to choose from many fine properties, negotiate and obtain financing with a low interest rate has never been better.
Some buyers continue to express concern about the “bottom of the market.” Where is it and should they buy now or wait? I say wait until you find the perfect property for you and then wait no longer. No one can tell where the bottom of the market is until it starts to rebound, and then it’s too late. Instead of focusing solely on that aspect, focus instead on finding the property that meets your needs. Then, even if the market goes down a bit more after you’ve purchased, you will have the satisfaction of owning what you want, instead of your second choice which is what you may end up with if you “wait for the bottom.” If you’ve got your eye on a good buy, get it now, before some other smart buyer decides to move on it.
Further cuts are expected by the Federal Reserve, bringing even lower interest rates and the selection of available property is unprecedented. Take your time, watch the market and buy wisely. You’ll be glad you did. Don’t forget to ask your real estate professional for their help in tracking and understanding the market. That’s why we’re here!
Aloha Elaine
Elaine Schaefer (R, GRI, ABR)
Broker in Charge – Princeville Resort Office
Graduate, Realtor’s Institute
Accredited Buyer’s Representative
Top Producer 100% Club
RE/MAX Kauai
Princeville Resort Office
POB 223632
Princeville, HI 96722
cell: 808 639 2935
home fax: 1 808 440 4552
email:soldonkauai@yahoo.com
website: www.kauairealestatenow.com
blog: www.blogs.alohaliving.com/princeville-condo-sales
……you can have your own piece of paradise
ask me how!
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