If you read the headline that shouted, November new home sales sink 11 percent, without knowing your local market, you could easily believe it was aimed at you. On one hand, it certainly could apply to your area but, on the other hand, it certainly may not. By now, you probably understand the simple real estate fact that markets vary a great deal by region. Hence, what is true here is not true there.
This naturally brings me to state the obvious. Performance of the national housing market is much less important than the dynamics of your local market. Yes, the markets are related but the facts show sales and pricing trends vary a great deal from one area to the next. You have to be a mental midget not to realize this trend will continue ad infinitum unless the government nationalizes the real estate industry.
Some Good Advice
Right off the bat, you have to understand if you are interested in buying real estate next year, you can’t just read the national headlines. I hope you are as blessed as I am. We have several good blogs that cover the local housing market. Find them and read them. The beauty of a blog is you can almost always make contact with the writer(s). Get to know them and don’t be afraid to ask questions.
I’d also do some homework on real estate agents. I’ve mentioned this in previous posts but finding an agent with experience in your area could be worth its weight in good deals. Couple this advice with visiting open houses and you should have a darned good feel for your market.
Don’t forget to check out online listings as well. My mind tells me every area in the country has online listings, so it shouldn’t be too much of a problem to find them. What are you looking for? Pricing and inventory trends. I admit you have to follow the listing for a period of time to get a good grasp on pricing and trends, but if the site has an archive, bingo, you may have just hit the jackpot.
Another Unlikely Source of Good Real Estate Deals
I’ve written about loan modifications in previous posts and said we’d have to wait to see if they are working. Guess what, the results are in. The success rate is even more bleak than expected. The same people who were sinking before they received a loan modification are back in the soup.
I can’t find any published reasons why this is the way it is but I have a guess. Assuming they didn’t lose their jobs, I believe they also didn’t lose their poor financial management skills. I say this with over 20 years of experience in the eyeball to eyeball financial arena.
In my stock broker days, I interviewed over 2000 people face to face. Of the 2000, approximately 10 had a clue about personal financial management. As an active insurance agent, I am still amazed that the stock broker days ratio is still alive and well.
That is just my opinion. Yours may, and probably will, be different.
Having said all that, you can probably guess the unlikely source of which I speak. The in-place loan modification programs aren’t much help for borrowers struggling to stay in their homes as the result of a job loss. Around these parts, the rickety labor market is a key factor behind rising delinquencies.
For example, two large retail chains are closing a total of four stores in this area. That raises the unemployment pool by about 500 people. Some of those people may have loan mods. Ugh!
Another problem with the loan mod plans is they do not sufficiently address the issue of negative equity. Obviously people owing more on their home loan than the property is worth is going to increase foreclosures. This means that the current modification programs not addressing negative equity are destined to fail. How, and if, this problem gets addressed is up to local law makers.
This part of the post isn’t about fixing loan mod programs, it is about locating a good deal. I think this pool of foreclosures may offer good deals. Again, you live in your local area so get savvy about the local loan mod program(s).
Whether you celebrate it or not, today is Christmas. I want to extend best wishes to one and all and say I am truly proud to be part of this blog. Josh found a need, filled it and helped make all of us a bit smarter and wiser.
Have a great day.
Photo: Henry Brett