When a business walks away from a building, somehow it’s for the good of the investors. When a person does it….it’s a deep flaw in personal integrity. How’s that again?
Sales took a total nosedive in the second half of November around here, seems like there was a “cooling off” period around the uncertainty of the home buyer tax credit expiration. Now that it has been re-instated, it seems like business has picked up again, though it is just so tough to get through underwriting! My advice? Manage your life to your credit score for the next couple of years, and learn how to assemble a running financial statement (which is actually kind of fun, and certainly helpful) and try to automate and simplify your purchasing. (read: ONE CREDIT CARD) It certainly helps when it comes time to present a picture of your financial situation to someone else………..
Last week I got a look at the “T2” option arm reset chart, which was sent to me by about four people, but surprisingly, no Canadians (Rick, are you on vacation?) While looking eerily similar to the Alt-A reset chart, I also noticed that the scale was smaller. I’d bet that if you put the sub-prime, alt-A and option arm charts on the same graph, the Option arm resets would be dwarfed by sub-prime, and similar to alt –A. Just guessing…..(OK I looked… The Peak is higher on Option Arms, but the volume is less……)
I think these are going to be dealt with by recasting, or placing them somewhere else on the balance sheet (That is not distressed) so they can let them through at a trickle, and try to limit the damage…..I cant tell you how many people are technically in default on loans around here and their bank is doing basically nothing. If you are in financial trouble in this market, I’d bet you could effectively “homebrew” your own restructuring yourself, before the banks even get around to processing your foreclosure.
This month also marks the annual remodeler’s report . I used to follow this report (but stopped for a number of years, while “remodeling” was passe), which is used to help people decide how much money a remodel will add to their properties value. Since the Last time I looked at it, it’s gone quite high tech! The Link to it is located at Copperwest.com here. It breaks stuff out by City, region and project, including trend indicators….total timesink, be careful!
2010 is looking to be a recovery year. Still brutal, I’m sure, but hopefully we’ll get better as the year continues on, and actually be posting news about decent markets and volumes……That would be a long time coming!
Happy New Year!
Things are quieting down; the last of the fall push is getting through. There are still buyers in the marketplace, buy they seem to be doing reconnaissance for early January. Lenders continue to be harsh, and I’m starting to determine that there is some sort of secondary market negotiation going on. It appears that one day a lender will let something through without a comment, and on another, they will call it out. I can tell the items that are getting called out are not related to any sort of government guaranteed program, so I’m left thinking that it’s some sort of other underwriting standard, especially with the appearance of randomness. Take away? MAKE SURE you have a strong lending package before you start looking for a home, and MAKE SURE you are looking at homes that you and your broker feel is a quality home, within the zoning of the area, and that it has at least a reasonable valid reason for being there (often called “properly entitled”)
The tax credit extension was a welcome sight, but it does appear that most of the people who could have taken advantage of the program, actually did. The new program (for current homeowners) that allows up to $6,500 in tax credit for a qualifying transaction will hopefully drive some spring sales…..
Everyone is looking to the Holidays, and getting ready for 2010, however, listing volume jumped a bit as new properties refilled the inventories. Pricing, however, remains soft.
One interesting development I read about this week is the I-banks out of New York have been buying portfolios of loans, and then segmenting them into risk groupings, and selling them off. Sounds a bit like the mortgage pools that caused the problem in the first place, but this seems to be moving the inventory out of the marketplace, which ultimately, is a good thing…..
For this month, I think we’ll take our outlook out of “prices are firming, but not rising” back down a small notch to “prices are slightly declining” although it’s a close call. Mostly seasonal…………
See you next month!