Good News in the Face of Mortgage Problems

Every day we hear about mortgage banking organizations closing and certain mortgage products being eliminated.  Stocks of many surviving lenders are low, and it is common to find shares in the industry that have lost 90 percent of their value in the past few weeks and months, according to a report from the National Association of Mortgage Brokers.

This economic downturn is mostly the result of the relaxed credit activity of subprime lenders over the last six years. The interest rates on these subprime loans are now adjusting to higher rates, making them unaffordable to many investors and homeowners, and causing delinquent mortgage payments and home foreclosures. Borrowers with good credit, however, are having no difficulty in making their mortgage payments, and new mortgages are available to them today just as they were a year ago.  Fannie/Freddie/FHA/and VA mortgages are fully available, underwriting is unchanged, and funding for closing as reliable as ever. In fact, mortgage applications are increasing, according to a recent report from the Mortgage Bankers Association.  Subprime loans are still available, but they are more difficult to find and their rates and terms have toughened up.

The rising inventories of unsold homes are benefiting today’s home buyers.  They have more homes to choose from and mortgage financing with historic low rates is still available for buyers with good credit histories.  Sellers are also becoming more realistic in the pricing of their property, and more open to negotiations.

Your privacy is My Concern

One of the highest priorities among high-end homebuyers and sellers is privacy.  Marketing a multi-million-dollar home that contains valuable art, jewelry, antiques, home furnishings and clothing is often done through the real estate agent’s select contacts, to preserve the personal security of the client.

Many exclusive homes never make it to the MLS service, because the agents who represent the sellers introduce the property selectively.  Agents who are familiar with the luxury market know that finding a buyer is often a matter of great detective work.  For every upscale home, there is an ideal buyer among a target group with a high probability of interest in such a property.  One of the secrets to success among agents who work with very high-end clients is that they are able to market the home directly to the right buyer pool, instead of casting a wide net that draws in people who are merely fascinated with the high-profile lifestyle.

The client’s business manager or financial advisor will often be the working contact in the negotiations process, while the client remains secluded.  Luxury home marketing requires extensive networking on the agent’s part. 

Retirement and Vacation Homes

For the last few years you’ve been toying with the idea of purchasing a vacation property or retirement home next to your favorite golf course.  What are you waiting for?  There are many factors in the real estate market that have conspired to make this a very good time to buy. Here are a just a few.

Even though we are experiencing a post-boom market, continuing low mortgage rates combined with larger inventory and more reasonable pricing have created an excellent window of opportunity for the buyer.

Over the past 20 years we experienced one of the longest running fiscal expansions in history, resulting in financial affluence for many people. This growth brought an extraordinary equity increase in primary residences and provided extra financial strength for those who are entering their retirement years. 

The unpredictability of the stock market has many investors seeking the relative stability of the real estate market.  And even though the market in general is slowing, the second home sector will be a strong investment for years to come.