Preventing Foreclosures

When it comes to preventing foreclosures and helping homeowner’s keep their properties, a little bit of common sense and compassion needs to be injected into the real estate mortgage industry.

Let’s take Countrywide Home Mortgage and Indymac Bank. Giants in the industry, who were saved from demise themselves last year, have it in their control to save homeowners from going under.
I’m a real estate professional and that makes for interesting conversation at dinner parties these days. People are talking about the difficulty they have encountered when trying to modify their mortgages to save their good credit rating.

I decided to see what is happening first hand. I called Countrywide and Indymac to find out what their policies are in regards to helping struggling homeowners, who are current, stay afloat. Both banks have the following plan: Don’t pay your mortgage for three months then they’ll talk to you. Until then, they won’t work with you, period. Indymac does have an online form that can be completed to put you on a waiting list, just in case you default.

Here’s the problem. Honest, hardworking mortgagors, who are now victims of the recession, are trying to make good. The inability of these banks to effectively address this large demographic, will only lead to more foreclosures and further deterioration of the real estate market and will ultimately further impact the failed economy.

I may be overly dramatic here, but with all the bailouts happening, what about the government directing these banks to prevent loans from even starting the foreclosure process and be proactive, rather than chasing fires as homeowners become delinquent. With the average cost of a foreclosure around $50,000 per bank, it just makes good business to work with loan modification. When a consumer’s credit is already negatively impacted, their level of motivation to work with a bank and prevent foreclosure is dramatically different than when they have something to save. 

Year End Review for Provincetown, Truro, Wellfleet and Eastham

All eyes are on the real estate market as it enters its fourth year of challenge, uncertain interest rates, low prices and a worldwide recession. Buyers are looking and there has been an increase in shopping activity, Provincetown through Eastham. But buyers are reporting they are waiting to pull the trigger until after the inauguration in two weeks. There is speculation that mortgage interest rates will drop to 4.5% across the board. This will mean huge opportunity and has generated many inquiries regarding active properties.

How did the market perform in 2008 compared to the previous three years?

I’ll break down the numbers for you right here. These numbers include all categories of real estate sold.

See my Web Site's Real Estate Blog (click here) for 2008 dollar volume and units sold figures for Provincetown, Truro, Wellfleet and Eastham.

2009 promises to be a year of change for many aspects of the real estate market on the Outer Cape. Check back here weekly on Friday morning for updates.

Call me at 508-789-1107 or email me mike@atlanticbaysir.com if you have questions or would like to post an entry. 

Next Moves in Real Estate

This week is a time for subtle reflection on where we've been and where we're heading.

Many of us take this week to write our goals and resolutions for next year.

With market projections not the merriest, it is a time to ponder what moves to make regarding real estate.

If you are thinking of buying, I'll repeat what I've been saying for the past year... it is an incredible time to buy...if you can. Mortgage interest rates and listed prices have never been so simultaneously low.

The media reports doom and gloom but there is opportunity everywhere, especially on the Outer Cape. Will prices come down more? It’s hard to tell, but right now conditions are ripe for a good buy.

Sellers get prepared to list your homes if you must. We've seen interest rates fluctuate between 4.75% to 5.2 % for 30 year fixed products. There is speculation that rates could drop as low as 4.5% this coming year. If you need to sell contact your real estate professional, price it right and use these low rates to get your property sold and get out of it.

One thing is for sure, 2009 will be filled with opportunity for those positioned to take advantage of it both sellers and buyers.

How Long for the Holidays?

Let me start by wishing you a Merry Christmas and Happy Holidays.

This is such a special time of the year, but after friends and family have gone home, carols have been sung and gingerbread devoured. When do you switch off the lights for the last time, remove the candles from the windows and put away those holiday decorations.

Sometimes, in our attempt to keep the holiday spirit alive, homes stay decorated well into January and maybe even early February.

This week on the closing table, we’ll look at what is an acceptable date to remove your Christmas tree and decorations from inside and outside your house.

New Years Day seems to be a popular date to start the year off with a clean slate and put away the holiday bric a brac. This tends to be a day off from work for the majority of holiday revelers and the time can be useful to put the house back to normal after almost two months of living in a decorated wonderland.

But, for those of us who like to hold unto the bright, holiday feeling just a little longer, as we transition into the cold gray winter, Little Christmas is an acceptable date to pack away the wreaths, lights, trees and garland. This date, known as the Epiphany, falls on January 6th and is the official end of the Christmas season. In history, before the integration of the Gregorian calendar, this was the celebrated date of Christmas Day. So, it is completely acceptable, according to tradition, if you leave your decorations up until the 6th of January.

However, being an individual is also important, so if holding unto the holiday spirit means that a string of twinkling lights linger in your décor until Memorial Day, so be it…

As a side note, if you have a loved one serving in a war, it is customary to leave candles in the windows until they return home safely.

Merry Christmas and Happy Holidays.

Interest in Rates

The mortgage industry experienced major adjustments this year. We saw many companies fail or be acquired by large industry giants. Unfortunately, even some of those giants became victim to the mortgage melt down and closed their doors.

Last week we saw some very interesting things happen in the mortgage industry involving interest rates.

Buyers have been hesitant to act on making a purchase due to the speculation that interest rates may come down. US Treasury officials have reported that a 4.5% interest rate may be introduced next year for primary home buyers only and not vacation homes or for refinancing.

Interest rates are already close to this 4.5 % rate. Here’s an example, as of the writing of this, December 12, 2008, a local Cape Cod bank announced a rate of 5% for a 30 year fixed mortgage with no points. This is truly an exceptional mortgage rate… it rivals the interest rates from the peak years of the market. If you’ve been following the mortgage rate activity, you know the significance to this 5% rate.

These low rates are not restricted to primary purchases. They are open to secondary markets, the refinance market and yes, even seasonal condominiums. As a side note, local banks will finance a seasonal condominium.

Low rates and significantly reduced listing prices are creating tremendous opportunity for buyers. Just look at any real estate advertisement and see where the prices are at, it’s incredible.

The snag for any purchase or refinance today, is to get approved for a mortgage. Your home must appraise, you must have low debt to income ratio and near perfect credit.

It will be interesting to see if the US Treasury moves rates next year to help the real estate market. But for now, even Representative Barney Frank stated that new measures most likely won’t happen for awhile.

What an interesting ride this is. The first few weeks of 2009 will be very telltale as to how the year may unfold for real estate.

You Can Do Magic

Double, double toil and trouble,

Abracadabra 

I put a spell on you, now you’re mine.

Are you asking yourself what all these magical lines are doing in a real estate radio segment? Well, this isn’t the only place where a little hocus pocus is turning up in real estate these days.

Sellers are turning to non traditional means to use as tools in selling their homes.

Forget the gimmicks of bonuses, new cars, vacations and more.

The latest is energy cleansers, house blessings and smudging. These unorthodox strategies have increased in popularity over the past few years as sellers eager to move their property will try anything.

Upon hearing this, I thought…wow, it’s come to this. Potions and powders don’t sell property…. a realistic listing price does. 

However, according to a recent report by NBC news…. Homes that are smudged and cleared of negative energy have actually sold.

One real estate agent reported that the condominium of a couple who was divorced and had bitterly argued in the home, was on the market, reasonably priced for over two years. The property was in a good location, clean and priced right. The desperate listing agent could not understand why the property had not sold after numerous showings. Hesitantly, she hired an energy cleanser to smudge the house and release the negative energy. She reported that immediately after the smudging, the next customer who looked at the property made a full price offer. She was stunned.

There is no scientific proof that this works so beware. If you are going down the road of energy cleansing, be careful that your wallet isn’t cleansed. But if it’s cheap enough, do it, it can’t hurt.

Standing on the Sidelines

As numerous and large price reductions continue to correct listing prices, buyers are standing on the sidelines and waiting to see just how low, the sellers will go.

From the buyer’s perspective this strategy can create anxiety. Here’s the risk. If you find a property you like and decide to play the waiting game you could lose out, especially now. Last week, interest rates decreased to the low 5’s for fixed 30 year products. This combined with price reductions are making many properties affordable for more buyers. This past holiday weekend we saw an increase in real estate shopping activity in Provincetown.

Sellers, exhausted form the long stretch of price reductions and time on the market, are renting their homes to year round renters in order to hold their investment until this slow market cycle ends. This may happen to a property you are sitting on the fence over and may lose it if the seller removes it from the market to rent. We’ve seen this lately on the outer cape. A buyer passes on a property in order to play the waiting game. Suddenly, the property is withdrawn from the market due to the seller renting the home. Opportunity is missed by both the buyer and seller in this instance. 

If you are in the market to buy and have identified your dream home on the outer cape, talk to your realtor about making an offer. Realistic offers are still being presented and sellers, eager to close a chapter of their lives, are negotiating. It might surprise you at what sellers are willing to do in this market to move their property.