Home Sales Up Foreclosures Going Up: Sunday Morning Thoughts 22 January 2012

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Home sales ended 2011 with an overall gain.  Mostly due to lower affordable prices, low-interest rates and a better outlook on the foreseeable job market.  It looks as though a real estate recovery is underway.

Homes sales were up but real estate prices were down and with the foreclosure crisis reigniting itself prices are due to go to new lows.  Many of the current sales for homes have been from foreclosures.   Short sales, once the dreaded enemy of many impatient investors is now the vehicle by which many real estate assets have been purchased and at hefty discounted prices for the more savvy investors.

So has flipping properties become a thing of the past?

Not at all flipping in a depressed market is still alive and well, and a well used strategy for many investors.  Only change has been the rules by which a flip can be done, but flipping nonetheless is still a viable practice.  Not all of the would-be homeowners will be able to negotiate with banks for a foreclosure let alone negotiate a short sale.

With more banks heating up the foreclosure pot, inventory is set to rise, more and more real estate deals will be sourced and made by savvy investors and home buyers alike.

But most foreclosures are sold by realtors.

Not all realtors can move foreclose properties, if the area is inundated with foreclosures a confused buyer may fall out of escrow on a few properties before finally deciding which property to close on.

So although the bleakness seems to be disappearing in some real estate markets, it is a matter of time before another cooling period will begin.

Stocks, and Bonds, and Mortgages Oh My: Sunday Morning Thoughts 10 October2010

This week has proven to be a time of many revelations.  The stock market has seen the dollar gain strength to only start falling short of expectations.  The Fed’s are possibly going to lower interest rates to help the slow moving economy to pick up speed.

And now President Obama has had to veto a bill that would make it harder on already suffering home owners when it comes to foreclosures.  The Senate obviously did not read the bill before voting.  As for mortgages-whether defaulting or originating -things are about to get even trickier and stricter than before.

What comes to mind, how all this will effect my investments, and is the New Reform Bill currently working?

The bill is slowly being implemented.  Keep you eyes and ears open for more updates.

The Bond market is rumored to be on the verge of a bubble about to burst.  But as you watch the video, predicting a bubble that will bust, is not as easy as you think.

Is A Bond Bubble Forming? Economist Burton Malkiel talks to Steve Forbes about the trouble with bubbles.

A final note on mortgages, as we have all heard Bank of America, JPMorgan Chase, and Ally Financial are placing some of their foreclosures on hold.  No doubt to check the paperwork.  Although halting the paperwork, will not halt the foreclosure process.  So once the paperwork is in order then the foreclosure will happen.

Many courts have been throwing the request for foreclosures out, due to multiple errors in the paperwork.  A temporary pause could cause pressure later.  Like when water is held by a dam then the dam is removed, the rage of the water causes more damage than if it were allowed to flow freely in the first place.

A false lift to home prices could happen in some areas if almost all of the foreclosures are halted for an area with a lot of impending foreclosures. If only a few are halted then the impact would be slight to minimal at best.

By no means will the temporary halting of foreclosures turn this better than buyers market into a strong seller’s market.  Instead of buyers stopping a new purchase of a home, one may want to take advantage of this new Bad News and invest through a short sale.

The lenders may be more apt to work towards getting a short sale approved instead of losing money on a halted foreclosure.