There is a great article on the disconnect between home prices and other key indators on efinance directory. The piece explores the relationship that typically exists between the price of homes in a given market with rent prices, median income, etc., etc. They point out that while real estate prices continually rise, what’s different in this “bubble” is that home prices have risen quite disproportionately to these other key indicators. This not only sheds light on what is different about what’s happening now (and what’s already happened in the last few months) and what typically happens in a hot real estate market it also helps you to understand how to succeed in predicting future real estate prices. This is very educational information and I highly recommend you take the time to read and digest it. Don’t miss this one. Click here for the full story.
Archive for the 'Real Estate' Category
Is There A Disconnect Between Home Prices and Other Key Indicators?
Published by 10 months, 1 week ago in Housing, Real Estate and Finance. 0 CommentsSome Mega-Builders Feel Pain of Mortgage Mess
Published by 10 months, 2 weeks ago in Real Estate and Mortgage. 2 Comments
They say when you ride the big waves, you sometimes get slammed into the beach. That seems to be the case for some of the big mega-builders / developers. Business Week is reporting that some of the big, publicly-traded builders / developers decided to get into the mortgage business at the height of the home building frenzy in an effort to “streamline” the sometimes lengthy process of getting buyers into their homes. There’s a reason why everyone isn’t in the mortgage business (or any other business, for that matter.) When you’re just dabbling in something as complex as the mortgage industry, you run a real risk of getting hurt.
I think the problem is magnified for these publicly traded companies. If you’re a small town builder (or even a big city builder, for that matter) and are not part of a publicly traded company, you make your business decisions based on what’s best for the business. Nobody knows if you are building 50 houses or 51 or 151. So you have no pressure to build “just one more” to “make the numbers for this quarter.” Publicly traded companies, on the other hand, are scrutinized each quarter. They have to do whatever they have to do to “make the numbers.” Therein lies part of the problem.
This is a good article that shows what at least part of the collateral damage from this whole situation will be. There is undoubtedly more to come. To read the whole story, click here.
38,000 Mortgage Industry Jobs Lost This Month!
Published by 10 months, 2 weeks ago in Real Estate and Mortgage. 2 Comments
Wow! That’s a big number. When the auto workers lay off 5,000 people, it’s a national crisis. I guess the Mortgage Workers of America ought to unite and have their union cry foul when they get laid off.
But seriously, this is big (and I don’t think we’ve even seen the tip of the iceberg yet. Yes, I believe this is a knee-jerk over-reaction. Yes, I believe it will get worse before it gets better. Yes, I also believe this will normalize itself over the coming months (maybe a year or two.) But even more important, I believe this will have significant negative impact on the real estate and mortgage industries. Those who were in it for the quick buck will shake out. Those who are in it for the long term will weather this storm, just like they have in the past.
In some ways, it’s like a forest fire. I recall a few years ago when almost all of Yellowstone National Park was burning. Many old-growth trees were lost along with the new growth. But fire releases pine tree seeds from pine cones. That’s the only way you get new trees. Yellowstone looked horrible for awhile, but it looks great now. That’s likely how it will be here. Things will look pretty black and charred for awhile, but before long new grass will sprout and things will green up again. The key is to hang on until it does.
If you would like to read the whole story about the 38,000 unfortunates, click here.
A More Personal Look At the Mortgage Mess
Published by 10 months, 2 weeks ago in Real Estate and Finance. 2 Comments
Most articles dealing with the mortgage problem deal with things on a “textbook” level, meaning they examine the theory behind what happened and what the likely outcome is. In this piece in the Washington Post, they look through the eyes of investors, examining how they got into the mess, and what is likely to happen from that perspective. This is a good piece and puts a face on what has, up to this point, been a nameless problem. To read the whole story, click here. Be sure to read down. It gets more interesting as you go.
20 Things That Affect The Value of Your Home — 10 Positively, 10 Negatively
Published by 10 months, 3 weeks ago in Housing and Real Estate. 1 Comment
Yes, I’m aware that countrywide mortgage had a big meltdown, and that the whole world is talking about that. Yes, I believe it’s big news. And finally, yes, like you, I’m burned out on all the mortgage discussion. So I thought I’d finish the week with something that will help in these troubled times.
Yahoo Finance has done a great piece on things that affect the sale (value / marketability) of your home. There are 10 positive things and 10 negative. This one is worth the read. I’m not going to spoil it for you by listing them here. There is a good explanation of why under each item, and it’s tightly written. Don’t miss this one. Click here for the full story.
