The
Housing Meltdown
As
Carl Sagan used to say “billyuns and billyuns” when talking about the Solar System. Now, government officials, and I used the
term very lightly, talk about Billions and Billions. Carl talked about stars,
they talk about YOUR DOLLARS. We have
been bombarded with well over a Trillion Dollars in Stimulus, Bail-out and
other such funds to ‘save the economy’. These
dollars as well as annual tax refunds to non-paying taxpayers are coming from
your tax pocket … and you know it.
The
National Association of Realtors (nothing more than a trade organization with
the 3rd largest PAC in the
The
real estate market peaked in 2003. The
players were well aware of the peak, did not want to see a slowing, and (under
the deregulation that occurred in the 1990’s) pushed to literally open the barn
doors for anything that was breathing.
Non-profit companies such as Nehemiah, American Dream, Home Gold and
many others popped up to charge the Sellers a $500 or more fee to take up to 6%
of the purchase price from the Sellers to give to the Buyers who were
encouraged because these ‘gifts’ were from really nice people ... this event
caused a 6% fake appreciation rate to occur immediately and then become
repetitive. People who could not save a
dime, people who were in credit card debt up to their eyeballs, people with
recent bankruptcies, people who were
allowed to claim any income level they wanted, and even people who were illegal
aliens all thought they too should hop on the bus and buy a house.
Mortgage
companies implemented low down, then no down, then “No Doc” loans coupled with
Buy-down ARMs that carried 5.75% margins (up from 2%)
and added on Interest Free and Option Loans to keep the ball rolling and the
profits coming in.
The
builders opened their doors wide, raised their prices, hired their own internal
appraisers and set up their own mortgage companies.
The
news media and TV networks contributed heavily to the impending problem with
fraudulent news manufacturing and shows like Flip This Junker and Find A Dummy To Buy It.
And
then, in 2006, the ball stopped rolling ...
the tipping point had been surpassed.
Greed started to rear its’ ugly head.
By
late 2006, it was apparent that the Mother of All Scams was collapsing. Not Me, Not My House
became a household phrase as people saw their expectations collapse.
Mortgage
companies starting dumping their mortgage loans on the unsuspecting Stock
Market.
The
folks with the Flip This Junker and Find A Dummy To
Buy It suddenly found out that the people who were dumb enough to the buy the
junk, could no longer get the loans to do it.
The flippers suddenly found out that they were underwater with the
second mortgages they secured on their own homes to buy those junkers to flip as they couldn’t find buyers anymore.
And
here we are in mid 2010 … the housing market has collapsed back to 2004 and
2005 values ... what appears to be an 18% to 20% drop in 2007, 2008 perceived
values. Nobody wants to believe it. Facts is facts! Lots of folks fell for the Scam and will now
pay for it for the rest of their lives.
Depending upon the direction of the government, they may pay for it for
the rest of their grandchildren’s lives.
So,
what do you do now? First off, if you
don’t sell, you don’t lose. The market should
recover back to 2004/2005 levels by 2013 or 2014 and start to pick up steam in
the 1% per year range soon after. Keep
in mind that a good 15% of the potential house buyers no longer exist … they
were not really qualified to begin with and definitely are no longer qualified
... they could not buy the house they are currently living in (if they are
still living there). Population growth
will ultimately solve the problem.
If
you do need to sell now, you can still win!
Granted, your house has lost a lot of perceived value, but so has the
house you wish to purchase. You will be
even. We can save you some expenses by
reducing our listing fees and rebating a portion of the purchase commission
fees paid by the seller back to you.
Keep this in mind, if you loose 20% on your
$200,000 house, you have lost $40,000 … Wow, that’s a lot! But, if you buy a $400,000 house with a 20%
loss, the Seller of that house has lost $80,000. Did you just gain $40,000 on the deal. Yes, you
did! Most folks just do not understand
this logic. Also, keep in mind that we offer up to 1.5%
of the real estate sales price back to you in cash along with the potential for
a full week vacation in an RCI or Wyndham Vacation Resorts Time Share subject
to availability.
But,
if you decide to buy new construction anytime soon, don’t think there are any
real deals out there. Most new construction
continues on at a very high rate of overpricing … now attempting to recover
their anticipated profits in their Ponzi
schemes. If you must have new
construction, we can help by rebating up to 1.5% of the purchase price in cash
back to you at the closing along with the potential for a full week vacation in
an RCI or Wyndham Vacation Resorts Time Share subject to availability.
All
you have to do is ask … at the beginning of your conversation regarding selling
and/or buying a house.
Ken Fisher,
Realtor
Broker / Owner
Ken R Fisher &
Associates, Inc.
317-845-9511
KenFisher@Realtor.com