As you have read in the past, the Platinum Group meets once a month to discuss the market, trends in the market, share ideas and to network. These individuals earn in excesses of $250,000 per year and have been meeting for over 5 years. Basically, they are the best of the best. Here is what they had to say about the market this month.
Foreclosures: the robosigners and paperwork/clerical errors had many banks jumping on the bandwagon putting a moratorium on foreclosures in all 50 states whether they are judicial or non-judicial states. Basically, this policy is wrong and they should continue with the foreclosures in non-judicial states and clean up their act and their process in the judicial states.
Foreclosures may be stopped temporarily going forward on properties under contract in our area. Be in touch with the listing agent and title companies on where the house is in the process and see if it is going to close or be stalled for any reason. As always, stay ahead of the curve.
Be careful of prices going forward because of the onslaught of foreclosures coming. Right now, we in Northern Virginia, have one of the highest 90 day late delinquency rates in the country. Many of those are people who stopped paying because they are in short sale but at least 50% of those, if not more, won’t close as short sales and will come on as foreclosures later. We had a historical month of foreclosures in September and these homes will come on the market soon so get price reductions today to get them sold as we are going to see a price reduction of 5 -20% over the next year – potentially. There is water behind the dam, it is only a matter of how much water they let over the dam as to how it will relate to where prices will fall. The question is who is going to be affected? We still have pockets and price points where there are multiple offers and escalation clauses. Our market is hyper local – you have to educate your buyers.
New home sales are down – builders aren’t making money – at least the production builders we are working with now. They are not accepting offers on houses because they say they aren’t making money at the lower prices and then a few months later they are dropping their prices to where offers were previously. They are just trying to hang on at this point.
Interest rates will not increase for the foreseeable future – market can’t sustain it and we don’t have inflation and rates and inflation go hand and hand.
What is happening with short sales? An approval came through with 8 days to close after working with Wells Fargo for over 1 year…some have had no issues, even with 2 mortgages…no zero deficiency judgments now, banks want money at the table or are getting deficiency judgments (Litton Loan Servicing, Wells Fargo – 2nd trust, PNC, and Aurora, Astoria, Bank of America and Wells Fargo all wanted cash at closing).
What Steve Harney said: Strategic defaults make up 31% of all distress sales. Additionally, now is the right time to be a buyer considering where interest rates are today – buy because it is a home, not an investment. Don’t worry about what may happen to prices in 6 – 12 months, if the house is right, buy today. If you are a seller, it looks like prices may come down in the future so reduce today to get it sold so you are competing with foreclosures that may enter the market. Either way, now is the time to get into real estate!
How is our market otherwise? Houses are selling and buyers are buying – now is the time to get out in front of people to get it done! Get it? Got it? Good!
Now, go sell something!