This is from an MSNBC News Article earlier this month

Amid the collapse of the sub prime lending market, the government has taken up the slack. The FHA has insured nearly a quarter of all new loans made this year, and about 80 percent of that business is from first-time homebuyers.

As of this summer, about 17 percent of FHA borrowers were at least one payment behind or in foreclosure, compared with 13 percent for all loans, according to the Mortgage Bankers Association.

“For too long FHA has not been able to control its losses,” said Sen. Kit Bond, R-Mo. Plummeting home prices are the main reason the agency’s financial reserves are dwindling. It’s previous analysis had assumed prices would hit bottom this year, but the agency is now expecting prices will fall through next spring. Lower prices mean bigger losses if the FHA has to foreclose and re-sell a property.

“While FHA didn’t take part in the housing boom, it’s not immune from the ripple effect of declining house prices,” said Brian Montgomery, the agency’s former commissioner. “That’s quite frankly what this is about.”

The agency itself does not make loans, but rather offers insurance against default. Many borrowers are willing to pay for the insurance because FHA loans only require down payments of 3.5 percent of the purchase price.

The FHA now insures about 5.3 million mortgages, up from about 4 million three years ago.

While FHA officials say that their borrowers have far stronger credit records than in the past, rising unemployment could make that irrelevant. The Labor Department reported Friday that 27 states saw unemployment rise last month, and 14 states and Washington, D.C., now have rates above 10 percent.

The agency is betting its finances will get better as the market turns around, said Rep. Scott Garrett, R-N.J. “I have real concerns about it.”

And Bert Ely, a banking industry analyst in Alexandria, Va., said he wouldn’t be surprised if the FHA asks for a taxpayer bailout in the coming years. It would be, however, far smaller than the $96 billion that mortgage companies Fannie Mae and Freddie Mac have tapped since they were seized by federal regulators a year ago, he said.

In an effort to weed out shady operators, the FHA will require lenders to have net worth of $1 million, up from the current requirement of $250,000, and undergo annual audits.

Quadrupling the limit could cut out some smaller lenders, says the Mortgage Bankers Association, which advocates a requirement of $500,000.

“Independent mortgage bankers are important to help provide price competition,” said Josh Denney, a lobbyist for the trade group. “We want to preserve them in the mortgage market.”

Mortgage brokers will no longer get FHA’s seal of approval, but they can still make FHA loans by working with an FHA-approved lender.

Last month, FHA banned mortgage company Taylor, Bean & Whitaker from making any more federally insured loans after it failed to submit a required financial report, raising concerns about fraud.

FHA officials have long pushed in Congress for more money to upgrade the agency’s outdated computer systems and say they are stepping up the agency’s efforts to catch shady operators who funnel bad loans.

Earlier this week, the Senate passed legislation that would spend $100 million to upgrade the Department of Housing and Urban Development’s computer systems, including FHA, and $20 million to combat fraud.

* * * How Private Money Lender$ Invest in Today`s Real Estate Market ! ! !

If your investments are not consistently earning you up to 16%, then you need more options!

You can take advantage of a changing market asa private lender.

Here is a few of the benefits you will get for reaching us right now:

• A quick overview of the types of properties we buy with private lenders
   
• A sample of the types of returns expected from being a private lender.
   
• How private lenders secure their money.
   
• How does a private lender cycle their money in and out of properties for maximum return?
   
• What are some of the worst and best case scenarios?
   

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Fill in your information in the form to the right and click submit!

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Do You Really want to $ell – We Really Want To Buy!!

We Care About Your Situation, Let Us Help!!

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Don Payne, GRI

Despite the downturn in our national economy… and a generally depressed national real estate market… the local Victorville/High Desert market seems to be currently experiencing a mini, “Buyer feeding frenzy” of sorts. This increased demand has caused a measurably upward shift in pricing and value of homes in our area. However, it is possible this development may be only temporary and could be significantly weakened when new, foreclosed (bank owned) properties once again start coming on the market. This projected increase of available housing inventory is reportedly due to occur sometime within the first quarter of 2010.

Basically, this adjustment in our real estate dynamic is merely a function of the old economic law of “supply and demand.” Currently, our local supply of available homes has been somewhat diminished, thus creating an increase in demand and the resulting upward pricing. Once we see a replenished supply of available properties… and assuming the old economic rules will still apply in this current economy… demand (and pricing) should then be expected to stabilize or decrease. In any event, our Victorville/High Desert real estate market is currently enjoying a dynamic, fast-moving and ever-changing condition.

Despite the general perception that this is a “Buyer’s Market,” the reality is that the Sellers (usually Banks, these days) seem to be in the control position. This development has allowed Sellers to successfully negotiate and obtain higher selling prices and to impose often redundant and more detailed initial “qualifying requirements” on prospective Buyers. These requirements often make the basic process of making a real estate purchase offer a bit more complicated and work intensive than we’ve experienced in previous market conditions.

Often, after evaluating all opening, initial purchase offers, all a Seller need do is to require competing Buyers to submit a so-called ”highest and best offer.” The normal Buyer response to this Seller demand is to discard any preconceived notions about negotiation strategies and play their final and best hand, right up front. The motivated Buyers, in effect, are placed in a position of blindly “bidding” against one another in an attempt to beat the competition. The resulting final selling price is often significantly higher than the published asking price.   

The practice of prospective Buyers starting purchase offer negotiations at an amount somewhat lower than the advertised asking price seems to be fading into memory. As previously discussed, many Buyers are now using the strategy of opening negotiations with an initial purchase offer substantially above the advertised asking price… in an attempt to beat out any competing Buyers. Thus, we’ve seen recent local sales often close anywhere from $10K to $35K (or more) above the asking price. This dynamic is compelling evidence that we are presently in a Seller driven market… regardless of constant media reports to the contrary.   

Another effective Buyer strategy is the submission of an all-cash-offer. For obvious reasons, such an offer will usually have the biggest favorable impact with Sellers. An all-cash purchase transaction will not usually be conditioned upon the standard contingencies for the Buyer’s successfully obtaining financing or for the home appraising for value, etc. Further, an all-cash-transaction usually can close escrow in a much shorter period of time… which is highly attractive to a typical Seller. It is generally considered that the longer an open escrow runs, the greater the chance of something going wrong and the transaction being cancelled or “falling out of escrow.”

It’s a curious thing to see this emerging trend occur in what is generally considered to be a “down” market. I believe this is a testament to the remarkable affordability of our Victorville/High Desert area. This affordability factor provides highly favorable investment opportunities and opens the door for first time homebuyers to enter the home ownership arena. Many prospective Buyers seem to be sensing this recent shift in the local market dynamic and are making the decision that NOW is the time to buy… before the market bottoms out and it’s too late to capitalize on the favorable market pricing. This increase in Buyer activity and demand seems to be the driving engine behind our upwardly trending real estate market in the High Desert area.

Author: Don Payne, GRI     DRE License #00928209

If you are looking for an alternative way to make money amid the financial crisis, you should try investing in real estate. Although many people believe that you are doomed to fail once you become a real estate investor amid these trying times, this is not exactly the case as many investors are still able to rake in big bucks despite the sagging US economy.

Click Here To View More Related Articles

To get started in the real estate investing business, one of the most important things that you should do is to believe that you can make it big in this competitive but highly rewarding industry. You should always have self-confidence when talking to buyers and negotiating with home sellers. And most of all, be proud of what you do and treat real estate investing as a serious business and not as a mere hobby.

Once you have established a profound belief in yourself, now is the time to turn that aspiration into reality. And one way to do that is to find profitable properties. According to experienced real estate investors, you make money in the real estate investing business when you buy investment properties, not when you sell them. Therefore, to ensure your success as a real estate investor, you should only invest in properties that can bring you nice profits.

When buying investment properties, make sure that they are located in a nice neighborhood. As we all know, a house’s location is very important when investing in real estate because it can determine the marketability of that particular property.

For instance, if the house you want to invest in is located in the middle of nowhere, it would be difficult for you to sell the property because naturally, nobody would want to live there. But if you buy an investment property that is located in a city with the best school district and other amenities, home buyers would do everything they can just to get their hands on that house. So which investment property would you rather choose? Of course, the one located in the best school district.

Meanwhile, to prevent yourself from being stuck in the middle of a good deal, educate yourself about the nuts and bolts of investing in real estate. Read instructional materials and manuals to expand your knowledge on the real estate business. There are also numerous websites that offers training programs for those who want to become successful at their chosen careers.

If you are looking for a good way to boost your knowledge on investing in real estate, log on to www.REIWired.com, the prime source of quality real estate education in the country.

If you are looking for an alternative way to make money amid the financial crisis, you should try investing in real estate. Although many people believe that you are doomed to fail once you become a real estate investor amid these trying times, this is not exactly the case as many investors are still able to rake in big bucks despite the sagging US economy.

Click Here To View More Related Articles

To get started in the real estate investing business, one of the most important things that you should do is to believe that you can make it big in this competitive but highly rewarding industry. You should always have self-confidence when talking to buyers and negotiating with home sellers. And most of all, be proud of what you do and treat real estate investing as a serious business and not as a mere hobby.

Once you have established a profound belief in yourself, now is the time to turn that aspiration into reality. And one way to do that is to find profitable properties. According to experienced real estate investors, you make money in the real estate investing business when you buy investment properties, not when you sell them. Therefore, to ensure your success as a real estate investor, you should only invest in properties that can bring you nice profits.

When buying investment properties, make sure that they are located in a nice neighborhood. As we all know, a house’s location is very important when investing in real estate because it can determine the marketability of that particular property.

For instance, if the house you want to invest in is located in the middle of nowhere, it would be difficult for you to sell the property because naturally, nobody would want to live there. But if you buy an investment property that is located in a city with the best school district and other amenities, home buyers would do everything they can just to get their hands on that house. So which investment property would you rather choose? Of course, the one located in the best school district.

Meanwhile, to prevent yourself from being stuck in the middle of a good deal, educate yourself about the nuts and bolts of investing in real estate. Read instructional materials and manuals to expand your knowledge on the real estate business. There are also numerous websites that offers training programs for those who want to become successful at their chosen careers.

If you are looking for a good way to boost your knowledge on investing in real estate, log on to www.REIWired.com, the prime source of quality real estate education in the country.

If you are looking for an alternative way to make money amid the financial crisis, you should try investing in real estate. Although many people believe that you are doomed to fail once you become a real estate investor amid these trying times, this is not exactly the case as many investors are still able to rake in big bucks despite the sagging US economy.

To get started in the real estate investing business, one of the most important things that you should do is to believe that you can make it big in this competitive but highly rewarding industry. You should always have self-confidence when talking to buyers and negotiating with home sellers. And most of all, be proud of what you do and treat real estate investing as a serious business and not as a mere hobby.

Once you have established a profound belief in yourself, now is the time to turn that aspiration into reality. And one way to do that is to find profitable properties. According to experienced real estate investors, you make money in the real estate investing business when you buy investment properties, not when you sell them. Therefore, to ensure your success as a real estate investor, you should only invest in properties that can bring you nice profits.

When buying investment properties, make sure that they are located in a nice neighborhood. As we all know, a house’s location is very important when investing in real estate because it can determine the marketability of that particular property.

For instance, if the house you want to invest in is located in the middle of nowhere, it would be difficult for you to sell the property because naturally, nobody would want to live there. But if you buy an investment property that is located in a city with the best school district and other amenities, home buyers would do everything they can just to get their hands on that house. So which investment property would you rather choose? Of course, the one located in the best school district.

Meanwhile, to prevent yourself from being stuck in the middle of a good deal, educate yourself about the nuts and bolts of investing in real estate. Read instructional materials and manuals to expand your knowledge on the real estate business. There are also numerous websites that offers training programs for those who want to become successful at their chosen careers.

If you are looking for a good way to boost your knowledge on investing in real estate, log on to www.REIWired.com, the prime source of quality real estate education in the country.

If you are looking for an alternative way to make money amid the financial crisis, you should try investing in real estate. Although many people believe that you are doomed to fail once you become a real estate investor amid these trying times, this is not exactly the case as many investors are still able to rake in big bucks despite the sagging US economy.

To get started in the real estate investing business, one of the most important things that you should do is to believe that you can make it big in this competitive but highly rewarding industry. You should always have self-confidence when talking to buyers and negotiating with home sellers. And most of all, be proud of what you do and treat real estate investing as a serious business and not as a mere hobby.

Once you have established a profound belief in yourself, now is the time to turn that aspiration into reality. And one way to do that is to find profitable properties. According to experienced real estate investors, you make money in the real estate investing business when you buy investment properties, not when you sell them. Therefore, to ensure your success as a real estate investor, you should only invest in properties that can bring you nice profits.

When buying investment properties, make sure that they are located in a nice neighborhood. As we all know, a house’s location is very important when investing in real estate because it can determine the marketability of that particular property.

For instance, if the house you want to invest in is located in the middle of nowhere, it would be difficult for you to sell the property because naturally, nobody would want to live there. But if you buy an investment property that is located in a city with the best school district and other amenities, home buyers would do everything they can just to get their hands on that house. So which investment property would you rather choose? Of course, the one located in the best school district.

Meanwhile, to prevent yourself from being stuck in the middle of a good deal, educate yourself about the nuts and bolts of investing in real estate. Read instructional materials and manuals to expand your knowledge on the real estate business. There are also numerous websites that offers training programs for those who want to become successful at their chosen careers.

If you are looking for a good way to boost your knowledge on investing in real estate, log on to www.REIWired.com, the prime source of quality real estate education in the country.

Looking for a good way to prepare for your retirement? Why don’t you try investing in real estate? Being a real estate investor is a rewarding career. And more importantly, it can help you fatten up your savings until the day you decide to just sit back and relax with your significant other.

Click Here To See More Related Articles

Over the last few years, real estate investing(REI) has become the bread and butter of many people. It has helped them make their dreams into reality. And despite the recent economic setback, the real estate business has given most of us many opportunities to make big gains.

However, REI is not as easy as it may seem. There are many things that you need to take into consideration. And one of the most important of them is your education.

Many great philosophers said that learning shouldn’t stop the moment you step out of school. This can be true for most real estate investors. If you want to succeed in this business, you should continue to learn even after your first successful transaction. You must never stop sharpening your skills because they can help you avoid making huge mistakes that can affect your business.

When investing in real estate, make sure that you are spending your money on profitable properties. Never invest in houses that can cause you big profit loss. Therefore, choose the properties that you are going to buy carefully.

Investment properties that have high profitability and marketability are those that have proximity to important establishments such as schools, hospitals, restaurants, cinemas, and other recreational facilities. Those that are located in areas where urban development projects are planned are also great real estate assets to invest in.

Aside from your education and the quality of your investment properties, another important matter that you should look into is your budget. Having sufficient cash flow is a must for a real estate investor because it can help ensure the success of a project. In addition, it allows an investor to act quickly and appropriately in case a good deal comes his or her way.

Real estate investing is indeed a good way to prepare for your retirement. With patience and perseverance, you can provide a brighter future for yourself and for your loved ones. Meanwhile, if you are looking for ways to boost your knowledge on REI, you can log on to www.Rehab-Real-Estate.com. The website is home to various learning resources that can bring out the best real estate investor in you.

Looking for a good way to prepare for your retirement? Why don’t you try investing in real estate? Being a real estate investor is a rewarding career. And more importantly, it can help you fatten up your savings until the day you decide to just sit back and relax with your significant other.

Click Here To See More Related Articles

Over the last few years, real estate investing(REI) has become the bread and butter of many people. It has helped them make their dreams into reality. And despite the recent economic setback, the real estate business has given most of us many opportunities to make big gains.

However, REI is not as easy as it may seem. There are many things that you need to take into consideration. And one of the most important of them is your education.

Many great philosophers said that learning shouldn’t stop the moment you step out of school. This can be true for most real estate investors. If you want to succeed in this business, you should continue to learn even after your first successful transaction. You must never stop sharpening your skills because they can help you avoid making huge mistakes that can affect your business.

When investing in real estate, make sure that you are spending your money on profitable properties. Never invest in houses that can cause you big profit loss. Therefore, choose the properties that you are going to buy carefully.

Investment properties that have high profitability and marketability are those that have proximity to important establishments such as schools, hospitals, restaurants, cinemas, and other recreational facilities. Those that are located in areas where urban development projects are planned are also great real estate assets to invest in.

Aside from your education and the quality of your investment properties, another important matter that you should look into is your budget. Having sufficient cash flow is a must for a real estate investor because it can help ensure the success of a project. In addition, it allows an investor to act quickly and appropriately in case a good deal comes his or her way.

Real estate investing is indeed a good way to prepare for your retirement. With patience and perseverance, you can provide a brighter future for yourself and for your loved ones. Meanwhile, if you are looking for ways to boost your knowledge on REI, you can log on to www.Rehab-Real-Estate.com. The website is home to various learning resources that can bring out the best real estate investor in you.

Looking for a good way to prepare for your retirement? Why don’t you try investing in real estate? Being a real estate investor is a rewarding career. And more importantly, it can help you fatten up your savings until the day you decide to just sit back and relax with your significant other.

Click Here To See More Related Articles

Over the last few years, real estate investing(REI) has become the bread and butter of many people. It has helped them make their dreams into reality. And despite the recent economic setback, the real estate business has given most of us many opportunities to make big gains.

However, REI is not as easy as it may seem. There are many things that you need to take into consideration. And one of the most important of them is your education.

Many great philosophers said that learning shouldn’t stop the moment you step out of school. This can be true for most real estate investors. If you want to succeed in this business, you should continue to learn even after your first successful transaction. You must never stop sharpening your skills because they can help you avoid making huge mistakes that can affect your business.

When investing in real estate, make sure that you are spending your money on profitable properties. Never invest in houses that can cause you big profit loss. Therefore, choose the properties that you are going to buy carefully.

Investment properties that have high profitability and marketability are those that have proximity to important establishments such as schools, hospitals, restaurants, cinemas, and other recreational facilities. Those that are located in areas where urban development projects are planned are also great real estate assets to invest in.

Aside from your education and the quality of your investment properties, another important matter that you should look into is your budget. Having sufficient cash flow is a must for a real estate investor because it can help ensure the success of a project. In addition, it allows an investor to act quickly and appropriately in case a good deal comes his or her way.

Real estate investing is indeed a good way to prepare for your retirement. With patience and perseverance, you can provide a brighter future for yourself and for your loved ones. Meanwhile, if you are looking for ways to boost your knowledge on REI, you can log on to www.Rehab-Real-Estate.com. The website is home to various learning resources that can bring out the best real estate investor in you.

Looking for a good way to prepare for your retirement? Why don’t you try investing in real estate? Being a real estate investor is a rewarding career. And more importantly, it can help you fatten up your savings until the day you decide to just sit back and relax with your significant other.

Click Here To See More Related Articles

Over the last few years, real estate investing(REI) has become the bread and butter of many people. It has helped them make their dreams into reality. And despite the recent economic setback, the real estate business has given most of us many opportunities to make big gains.

However, REI is not as easy as it may seem. There are many things that you need to take into consideration. And one of the most important of them is your education.

Many great philosophers said that learning shouldn’t stop the moment you step out of school. This can be true for most real estate investors. If you want to succeed in this business, you should continue to learn even after your first successful transaction. You must never stop sharpening your skills because they can help you avoid making huge mistakes that can affect your business.

When investing in real estate, make sure that you are spending your money on profitable properties. Never invest in houses that can cause you big profit loss. Therefore, choose the properties that you are going to buy carefully.

Investment properties that have high profitability and marketability are those that have proximity to important establishments such as schools, hospitals, restaurants, cinemas, and other recreational facilities. Those that are located in areas where urban development projects are planned are also great real estate assets to invest in.

Aside from your education and the quality of your investment properties, another important matter that you should look into is your budget. Having sufficient cash flow is a must for a real estate investor because it can help ensure the success of a project. In addition, it allows an investor to act quickly and appropriately in case a good deal comes his or her way.

Real estate investing is indeed a good way to prepare for your retirement. With patience and perseverance, you can provide a brighter future for yourself and for your loved ones. Meanwhile, if you are looking for ways to boost your knowledge on REI, you can log on to www.Rehab-Real-Estate.com. The website is home to various learning resources that can bring out the best real estate investor in you.

Hello all you Rockport Lovers! Be sure and check out our new VIDEO TOURS of Rockport at the end of the post…(Kadi is nuts about her new Flip cam!) you’ll see our gorgeous bays, coastal cottages, local wildlife, and hear her commentary as she tempts you to come be a part of our incredible waterfront community!

If you missed it, the annual “Holiday Symphony by the Sea” this past Sunday was spectacular! Wonderful music provided by the Corpus Christi Symphony and the Rockport-Fulton High School Choir at the Martha Luigi Auditorium. There was something for everyone…classical selections from Vivaldi, the extremely beautiful Mother Goose Suite from Ravel (my very favorite composer), the prayer from Hansel and Gretel, a Christmas Rhapsody arranged by the brilliant Henry Mancini, and then one marvelous holiday medley after another (Christmas and Hanukah favorites). That’s when the fun really began, because we in the audience got to sing along!!

You see, even though we are in a secret little backwater, we have really classy things going on here all the time. Great music, very famous art festivals year-round (remember, Coastal Living Magazine rates Rockport as one of the 10 best coastal communities to live in in the U.S., due in large part to our local art scene!!). And big city life is just 25 minutes away in Corpus Christi!

Let’s talk about some other reasons to live here: how about your health and happiness??!!  There’s the benefits of NO traffic, far less noise, reduced pollution, really interesting, fun people and, best of all, great natural beauty to keep you content!

ADV

If you are interested in building your own coastal cottage here, take a look at the four (4) lots in the LINK below. There’s possibilities for residential and commercial, and one (on Peet’s Bend), is on a lovely canal near Copano Bay. Call with any questions: Jim Wills, 361-463-9820.  Copy and paste the link into the url:

http://www.navica2.net/displays/?n=392&i=99991&k=j4mAO

Barrie McKenna Published on Tuesday, Dec. 15, 2009

One of the enduring mysteries of the Great Recession is how Canada largely escaped the crushing home price correction that hit virtually every other Western country. After a brief setback in 2008, Canadian prices resumed their upward climb. The average price of a house is up a remarkable 21 per cent in the past 12 months, reaching a new record of $341,079 in October. Fresh numbers on home sales are due out today. In the hottest markets, such as Vancouver, buying fever is back, marked by bidding wars and overnight campouts to buy condos.

Compare that with the United States, where housing prices are down roughly 30 per cent from their peak. Even in Europe, values are off an average of 6 per cent. The contrast is startling, and quite frankly, defies logic. It isn’t as if Canada was immune to the worst recession since the Second World War. The economy contracted, stocks tumbled, unemployment jumped more than two percentage points to 8.5 per cent, 321,000 jobs were destroyed and personal income fell.

There are two possible explanations for the anomaly. One is that Canada has coated itself in armour, aided by brilliant monetary stewardship at the Bank of Canada, prudent lending by banks and just the right dose of stimulus from the Harper government. Or, more probably, it’s not a protective coating at all, but a real estate bubble that will eventually burst – two years after the rest of the world. Arguing for the armour case in a new report for the Federal Reserve Bank of Cleveland, University of Western Ontario economist James MacGee says the main reason Canada’s housing market hasn’t gone bust is because of much sounder lending practices.

An explosion of subprime and high-risk mortgages, rather than merely low interest rates, was the primary reason that U.S. prices boomed and then collapsed, according to Prof. MacGee. The result is that Americans took on too much debt, relative to the both the value of their homes and their incomes. That left them highly vulnerable. They bought homes they couldn’t afford, leading to an inevitable spike in delinquencies and tumbling prices. In Canada, that didn’t happen.

Prof. MacGee said risky lending was held in check because banks did less securitization of mortgages. Also, stricter capital requirements and tighter mortgage insurance rules discouraged subprime lending. The result is that mortgage delinquency rates in Canada and the United States, which had been comparable roughly up until 2006, began to diverge: They spiked in the U.S., but held steady in Canada. Prof. MacGee acknowledges the possibility that he’s wrong, and that Canada could face a correction some time in 2010. But he said that if it happens, it’s likely to be more of a “housing market slowdown, rather than a bust.”

There is another camp. A small, but growing minority of experts are now warning of a more severe real estate bust in Canada. Last week, Bank of Canada Governor Mark Carney said excessive household debt poses the biggest threat to the recovery. And in a recent Globe and Mail column, economist David Rosenberg, chief strategist at Toronto-based Gluskin Sheff + Associates Inc., raised the spectre of a Canadian housing bubble that is on the verge of collapse. He figures prices are 15 to 35 per cent overvalued, based on relative rental rates and incomes. Canadians should pay attention. Mr. Rosenberg, a former Merrill Lynch economist, was among the first on Wall Street to warn of a housing-led recession in the United States. He knows what a housing correction looks like. Homes are now less affordable in Canada than they’ve even been, relative to income. So while it’s true that Canada’s banks are financially sound, it’s less clear that homeowners are being similarly prudent. Too many appear to be blindly following Americans down a path of excessive debt, enticed by low rates. The ratio of mortgage debt to household incomes in Canada recently hit a record 70 per cent, up from 65 per cent a year ago. And 40 per cent of home buyers are opting for short-term, variable-rate mortgages, which will eventually ratchet up, leaving some owners in deep financial trouble. Canadian authorities have seen the U.S. movie; they helped fuel the hot market in Canada, and presumably they know how to cool it. The Bank of Canada would raise its key interest rate and Canada Mortgage and Housing Corp. would wind down its purchases of insured mortgages from commercial banks. Brace yourself for a rough 2010.

 CANADIAN HOUSING: FIRST IN, FIRST OUT, BUT WHERE TO FROM HERE?

Existing home sales and prices, as provided by the Canadian Real Estate Association (CREA), went through a sharp downturn last year, falling by 40% and 12% respectively from their peak of late 2007.   Just as quickly and sharply, a phenomenal rebound kicked off early this year and was still going strong early in the fourth quarter. From their trough sales had surged by 74% as of October, while the average price was 20% higher.  In this extremely sharp two-year cycle, the housing market has undeniably held up to its ‘fi rst-in, fi rst out’ (FIFO) historical billing. The downturn in existing home sales and prices (Q1/2008) preceded the start of the technical recession (dated Q4/2008) by three quarters. On the flip side, the strong recovery in existing home sales and prices that started in earnest in Q1/2009 led the end of the technical recession (dated Q3/2009) and the start of the overall economic recovery by at least two quarters.

Furthermore, the Canadian resale housing market downturn and recovery was as V-shaped as can be. The length of each leg of this cycle was also nearly symmetric with the downturn lasting roughly all of 2008 and the ensuing recovery spanning all of this year.  While in the thick of a recession, the strongest countervailing force that set the stage for the mother of all rebounds, apart from lower prices, was lower interest rates. Recall that the Bank of Canada began easing its monetary policy back in late 2007, when it was becoming clear that the U.S. economy was tilting into recession and would surely drag Canada along with it. By the time the recession officially hit in Canada a full year later, the overnight rate had already been slashed from 4.50% to 2.25%, more than halfway en route to its all-time low of 0.25% by April 2009.

All said, the housing market has gone beyond retracing its steps and fully recovering from the end of 2007 – which had marked the peak of a half-decade long boom, concentrated in Western Canada. As of October 2009, national sales were running at a blistering 550K annual pace and the average price was $340K.

Seasonally-adjusted monthly sales hit all-time record volumes for 3 of the last 4 months, and are on track to continue this record-setting pace over the next few months. As of October, both sales and the average price stood 5% higher than their respective 2007 peak. Extrapolating this trend echoes Buzz Lightyear’s mantra “to infinity, and beyond!”. 

Back here on earth, however, this latest housing cycle raises a number of concerns. For one, was the whole two year cycle just a blip? A second, related question would be: is the recovery sustainable or was it all too much, too fast in the midst of a recession and early stages of recovery? Digging into the pace and magnitude of the rebound, more technical questions arise, such as: how much of the rebound was simply the unleashing of pent-up demand? Alternatively, how many of the current sales are simply being brought forward on the expectation that interest rates must eventually rise, in effect stealing from future demand? Last but not least, is a bubble brewing in Canadian housing just a blip?

The ‘blip’ story goes something like this. The downturn in 2008 was that of a housing market being just an innocent by-stander getting unfairly sideswiped by fears of a U.S.- style downturn and rock bottom consumer confidence in the midst of an extreme financial crisis.  As these fears abated and the worst of the financial crisis passed, the doom and gloom headlines became more nuanced and some modicum of  confidence was restored, whereas little existed before. As a consequence, the housing market navigated rough waters and made it through the storm relatively unscathed.  This narrative is not wrong per se, but its implicit conclusion is that all is back to ‘normal’, whatever that may be. It also suggests that it will be smooth sailing from now on. In other words, the volatility in sales and prices has shaken out, and the expectation from here onward is a steady uptrend.

As a result, we see two problems with calling this cycle a blip. Both arise from near-sightedness. First, it fails to think about where the market stood pre-downturn. Second, it neglects the fact that the current uptrend is too steep and that the resulting erosion in affordability will come back to bite into future demand. To expand, the first problem is that the ‘blip’ notion fails to take a longer-term perspective on home values. If the Canadian housing boom (roughly 2002-2007) resulted in modestly overvalued residential real estate, which we estimate was roughly 10% on a national scale at the 2007 peak, the downturn had just about set things right from a value perspective, with a peak-to-tough price adjustment of -12%.  For a number of reasons, we never forecasted a U.S.-style crash in Canadian housing. On the other hand, the adjustment that took place in 2008 looked warranted from a fundamental value perspective. The resulting improvement in affordability that came from more modest prices was encouraging and sustainable from a macro-financial perspective. From their trough, the most sustainable path for Canadian home prices would have been a gradual and modest uptrend aligned with nominal income growth. But now that home values are already past their previous peak in such short order, we estimate that the typical home remains overvalued by 12% at the national level. Unfortunately, sheer momentum suggests that this overvaluation is likely to increase over the course of the next few quarters, peaking at 13-15% in H1/2010

The misalignment of home prices with their fundamental drivers, such as demographics and income, cannot last. That much is known. What is less clear is the exact timing of when and precise channel by which the two will eventually realign. Because a necessary realignment has been erased so  quickly without support from income growth, another adjustment must take place – although it could take many forms. As of our writing this note, early signs of market cooling are emerging and our analysis still suggests the most likely outcome is a soft landing and relative stagnation of home values in real-terms along with a resumption of stronger income growth over the 2011-13 time frame.

The second problem with the ‘blip’ characterization is that fails to look forward to the eventual resetting of interest rates – what happens when the sturdy trampoline of rockbottom policy interest rate that continues to fuel the sharp market rebound is taken away? Changes in affordability that rest solely on lower interest rates are inherently cyclical in nature, as opposed to those that arise from household income or homes prices.

Call this housing cycle a blip if you like. But we feel that is misleading, especially because of what this suggests for the future. While the market looks remarkably unperturbed from start to end of this sharp cycle, existing home sales and prices cannot sustainably stay on their current path. Markets are currently very tight and favour sellers, as evidenced by multiple competing offers and bidding wars, but we expect them to rebalance over the course of 2010. As the central bank begins to hint at a tightening monetary policy cycle in the second half of next year, sales could well see a last gasp of strength. Moreover, by that time, the availability of units on the supply side should provide a relief valve helping to cool price growth. And, by 2011, while the overall economy will have improved significantly, housing markets will be losing momentum. Repaying the past, stealing from the future.

On the issue of pent-up demand, we had calculated that, on a nationwide basis, at most 53,000 existing home sales that would normally have occurred in Q4/2008 and Q1/2009 did not occur because of the crisis of confidence resulting from the financial market turmoil. This figure is established on the basis of a continuation of the pre-recession downtrend in sales, which actual sales undershot significantly.  Since Q2/2009, however, sales have overshot that trend by a wide margin. We calculate that 75-100% of this pent-up demand would have been absorbed by October.  Sales have been tracking our near-term expectations well and we continue to judge that any remaining pent-up demand will have likely been exhausted by November. At the very latest, by year-end this source of demand will have completely dried up.

The full absorption of pent-up demand by itself should help to slow overall sales in the first half of 2010 compared to their recent pace, which has already begun to cool on a 3-month trend basis.  Over the course of Q2/2009 and Q3/2009, up to one in five sales (monthly seasonally-adjusted units) could reasonably have been attributed to those that had previously been delayed

Gives valuable information on how to maximize your investment with 1031 Exchange California. Properties are especially popular because of the strong and robust return on investment for real estate investors by San Francisco TIC.
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Original Link:1031 Exchange California – San Francisco TIC – iloveinvestments.com

Episode 167 of the daily Toronto Real Estate Musing video blog. George O’Neill vlogs as he returns a Uhaul truck he rented to take garbage to the Toronto Commissioners Street Transfer Station, part of the joy of owning rental properties and being a landlord.

If you are interested in Beach or downtown Toronto real estate or wish to discuss this topic further, please email George@GeorgeONeill.ca or leave a comment below.

Episode 164 of the daily Toronto Real Estate Musing video blog. George O’Neill vlogs while at the Commissioners Street Transfer Center in Toronto. He dropped off metal for recycling and garbage, left behind by a former tenant who just moved from one of our properties.

If you are interested in Beach or downtown Toronto real estate or wish to discuss this topic further, please email George@GeorgeONeill.ca or leave a comment below.

Episode 162 of the daily Toronto Real Estate Musing video blog. George O’Neill video blogs as he goes about renting a UHaul truck to remove garbage from one of his apartments. This is part of being a Property Manager.

If you are interested in Beach or downtown Toronto real estate or wish to discuss this topic further, please email George@GeorgeONeill.ca or leave a comment below.

Wholesaling houses is a great way to make money in the real estate business. It allows you to earn tons of profits without having the need to fear for the safety of your investment capital. And most of all, you don’t need to spend a large sum of money up front to get started in this business.
In the language of real estate investors, to wholesale a property basically means finding a bargain property and then selling that property to a bargain hunter. The task of a wholesaler can be summed up in three simple steps: finding a property, placing that property under contract, and then assigning the said contract to an end buyer.

You might be wondering how a real estate investor earns money by wholesaling houses. Believe it or not, a wholesaler usually earns $5,000 to $15,000 worth on assignment fees for every sale of property he has facilitated. Sometimes, the figure may fall below $5,000 or exceed the $15,000 mark. Just imagine how much an investor can earn if he has more than a few properties placed under contract at the same time. Learn how successful wholesalers do it by clicking here.

What’s best about being a wholesaler is that you don’t need a huge investment capital just to rake in big profits. Because you are not technically buying a property, you don’t have to face big risks or worry about losing your capital in one go. And unlike being a rehabber of properties, you don’t have to wait until the renovations are finished to make profits. Usually, a wholesaler can complete a transaction within a seven to 45-day time-frame.
Although the process of wholesaling houses seems simple, there are certain things that you need to consider guaranteeing the success of your business. The first one is to have a steady source of properties. Many investors find it hard to earn big bucks through this method of real estate investing because they can’t find properties to place under contract. Therefore, to avoid failure, you should create a list of motivated home sellers to ensure a stable source of investment properties.

If you have a seller’s list, you should also have a sound buyer’s list for how can you make money from these properties if you can’t find buyers for them? Building a buyer’s list is not that complicated. You can either put up advertisements on the paper and the Internet or tell your fellow real estate investors about the properties you want to wholesale. Always remember that the secret to creating a strong buyer’s list is obtaining as many names as possible.
If you want to know how the process of wholesaling houses works, click here.

Wholesaling houses is a great way to make money in the real estate business. It allows you to earn tons of profits without having the need to fear for the safety of your investment capital. And most of all, you don’t need to spend a large sum of money up front to get started in this business.
In the language of real estate investors, to wholesale a property basically means finding a bargain property and then selling that property to a bargain hunter. The task of a wholesaler can be summed up in three simple steps: finding a property, placing that property under contract, and then assigning the said contract to an end buyer.

You might be wondering how a real estate investor earns money by wholesaling houses. Believe it or not, a wholesaler usually earns $5,000 to $15,000 worth on assignment fees for every sale of property he has facilitated. Sometimes, the figure may fall below $5,000 or exceed the $15,000 mark. Just imagine how much an investor can earn if he has more than a few properties placed under contract at the same time. Learn how successful wholesalers do it by clicking here.

What’s best about being a wholesaler is that you don’t need a huge investment capital just to rake in big profits. Because you are not technically buying a property, you don’t have to face big risks or worry about losing your capital in one go. And unlike being a rehabber of properties, you don’t have to wait until the renovations are finished to make profits. Usually, a wholesaler can complete a transaction within a seven to 45-day time-frame.
Although the process of wholesaling houses seems simple, there are certain things that you need to consider guaranteeing the success of your business. The first one is to have a steady source of properties. Many investors find it hard to earn big bucks through this method of real estate investing because they can’t find properties to place under contract. Therefore, to avoid failure, you should create a list of motivated home sellers to ensure a stable source of investment properties.

If you have a seller’s list, you should also have a sound buyer’s list for how can you make money from these properties if you can’t find buyers for them? Building a buyer’s list is not that complicated. You can either put up advertisements on the paper and the Internet or tell your fellow real estate investors about the properties you want to wholesale. Always remember that the secret to creating a strong buyer’s list is obtaining as many names as possible.
If you want to know how the process of wholesaling houses works, click here.

Wholesaling houses is a great way to make money in the real estate business. It allows you to earn tons of profits without having the need to fear for the safety of your investment capital. And most of all, you don’t need to spend a large sum of money up front to get started in this business.
In the language of real estate investors, to wholesale a property basically means finding a bargain property and then selling that property to a bargain hunter. The task of a wholesaler can be summed up in three simple steps: finding a property, placing that property under contract, and then assigning the said contract to an end buyer.

You might be wondering how a real estate investor earns money by wholesaling houses. Believe it or not, a wholesaler usually earns $5,000 to $15,000 worth on assignment fees for every sale of property he has facilitated. Sometimes, the figure may fall below $5,000 or exceed the $15,000 mark. Just imagine how much an investor can earn if he has more than a few properties placed under contract at the same time. Learn how successful wholesalers do it by clicking here.

What’s best about being a wholesaler is that you don’t need a huge investment capital just to rake in big profits. Because you are not technically buying a property, you don’t have to face big risks or worry about losing your capital in one go. And unlike being a rehabber of properties, you don’t have to wait until the renovations are finished to make profits. Usually, a wholesaler can complete a transaction within a seven to 45-day time-frame.
Although the process of wholesaling houses seems simple, there are certain things that you need to consider guaranteeing the success of your business. The first one is to have a steady source of properties. Many investors find it hard to earn big bucks through this method of real estate investing because they can’t find properties to place under contract. Therefore, to avoid failure, you should create a list of motivated home sellers to ensure a stable source of investment properties.

If you have a seller’s list, you should also have a sound buyer’s list for how can you make money from these properties if you can’t find buyers for them? Building a buyer’s list is not that complicated. You can either put up advertisements on the paper and the Internet or tell your fellow real estate investors about the properties you want to wholesale. Always remember that the secret to creating a strong buyer’s list is obtaining as many names as possible.
If you want to know how the process of wholesaling houses works, click here.

Wholesaling houses is a great way to make money in the real estate business. It allows you to earn tons of profits without having the need to fear for the safety of your investment capital. And most of all, you don’t need to spend a large sum of money up front to get started in this business.
In the language of real estate investors, to wholesale a property basically means finding a bargain property and then selling that property to a bargain hunter. The task of a wholesaler can be summed up in three simple steps: finding a property, placing that property under contract, and then assigning the said contract to an end buyer.

You might be wondering how a real estate investor earns money by wholesaling houses. Believe it or not, a wholesaler usually earns $5,000 to $15,000 worth on assignment fees for every sale of property he has facilitated. Sometimes, the figure may fall below $5,000 or exceed the $15,000 mark. Just imagine how much an investor can earn if he has more than a few properties placed under contract at the same time. Learn how successful wholesalers do it by clicking here.

What’s best about being a wholesaler is that you don’t need a huge investment capital just to rake in big profits. Because you are not technically buying a property, you don’t have to face big risks or worry about losing your capital in one go. And unlike being a rehabber of properties, you don’t have to wait until the renovations are finished to make profits. Usually, a wholesaler can complete a transaction within a seven to 45-day time-frame.
Although the process of wholesaling houses seems simple, there are certain things that you need to consider guaranteeing the success of your business. The first one is to have a steady source of properties. Many investors find it hard to earn big bucks through this method of real estate investing because they can’t find properties to place under contract. Therefore, to avoid failure, you should create a list of motivated home sellers to ensure a stable source of investment properties.

If you have a seller’s list, you should also have a sound buyer’s list for how can you make money from these properties if you can’t find buyers for them? Building a buyer’s list is not that complicated. You can either put up advertisements on the paper and the Internet or tell your fellow real estate investors about the properties you want to wholesale. Always remember that the secret to creating a strong buyer’s list is obtaining as many names as possible.
If you want to know how the process of wholesaling houses works, click here.

Wholesaling houses is a great way to make money in the real estate business. It allows you to earn tons of profits without having the need to fear for the safety of your investment capital. And most of all, you don’t need to spend a large sum of money up front to get started in this business.
In the language of real estate investors, to wholesale a property basically means finding a bargain property and then selling that property to a bargain hunter. The task of a wholesaler can be summed up in three simple steps: finding a property, placing that property under contract, and then assigning the said contract to an end buyer.

You might be wondering how a real estate investor earns money by wholesaling houses. Believe it or not, a wholesaler usually earns $5,000 to $15,000 worth on assignment fees for every sale of property he has facilitated. Sometimes, the figure may fall below $5,000 or exceed the $15,000 mark. Just imagine how much an investor can earn if he has more than a few properties placed under contract at the same time. Learn how successful wholesalers do it by clicking here.

What’s best about being a wholesaler is that you don’t need a huge investment capital just to rake in big profits. Because you are not technically buying a property, you don’t have to face big risks or worry about losing your capital in one go. And unlike being a rehabber of properties, you don’t have to wait until the renovations are finished to make profits. Usually, a wholesaler can complete a transaction within a seven to 45-day time-frame.
Although the process of wholesaling houses seems simple, there are certain things that you need to consider guaranteeing the success of your business. The first one is to have a steady source of properties. Many investors find it hard to earn big bucks through this method of real estate investing because they can’t find properties to place under contract. Therefore, to avoid failure, you should create a list of motivated home sellers to ensure a stable source of investment properties.

If you have a seller’s list, you should also have a sound buyer’s list for how can you make money from these properties if you can’t find buyers for them? Building a buyer’s list is not that complicated. You can either put up advertisements on the paper and the Internet or tell your fellow real estate investors about the properties you want to wholesale. Always remember that the secret to creating a strong buyer’s list is obtaining as many names as possible.
If you want to know how the process of wholesaling houses works, click here.