With US real estate prices still on the way down, most would-be real estate investors are facing issues if they need to refinance a mortgage on a property they were renting out. The mortgage resets are not exclusive to residential buyers and a lot of investors are facing problems also. Refinancing a mortgage is the big issue currently, because, whatever mis-information might be being spread around by the banks and governments, credit markets remain tight.
SINGLE LARGEST ONE-MONTH DECLINE – Index Stands 25.3% below April 2008 Levels; 29.5% below peak of October 2007
The Moody’s/REAL National All Property Type Aggregate Index from Real Estate Analytics, LLC, (REAL), measures 135.31 for April 2009, a decrease of 8.6% from the previous month and single largest one-month decline. The Index, which has captured price data through the end of April 2009, is now 25.3% lower than it was a year ago and 29.5% below the peak measured in October 2007. The index also indicated a 27.4% drop in prices over the past two years.
More on MOODY’S/REAL COMMERCIAL PROPERTY PRICE INDEX DECLINES 8.6% FOR APRIL
Foreclosure rates in the U.S. are big news world wide. The continuing glut of foreclosed and distressed properties on the U.S. market caused home values to drop another 16.8% over this time last year, and in some parts of the U.S. the drop was even steeper.
The U.S. real estate market is either showing signs of recovery or continues to melt down to new and ever more frightening lows, depending on what you read and who is writing it.
As per usual, the best one can say about the “news” as to whether now is a good time to invest in real estate is at best confusing, at worst deliberately so. But there are some indicators giving an idea as to when and at what price is a good time to consider re-investing in property. Ignoring the obviously “spun” headlines from the government press release farms such as The Times, these are a few recent, factual articles that might be of interest as it would appear that the commercial real estate bubble is now starting to burst – and as predicted will have an impact on the credit availability in the residential sector.
Since U.S. President Barack Obama unveiled his plan to help troubled U.S. homeowners rework their mortgages by underwriting part of the expense for select lenders under very limited conditions, the results have been underwhelming.
According to a June 11th Associated Press release, U.S. foreclosures increased 18% over this time one year ago, and the crisis is now spreading to prime mortgages due to high unemployment.
A cliche, I know, but I was sent a press release recently that caught my attention. Regular readers will know I rarely publish press releases because of the unrealistic nature of the projections in most of them, but this one looks interesting.
It’s true: In some parts of the U.S., houses are going for as little as $1,000.
If you live outside the U.S. you’ve probably seen at least one article describing how some foreign investor is getting rich by snapping up $1,000 foreclosed homes and renting them out or flipping them, but beware. The chances of that actually being true are slim. It’s much more likely that investor is getting rich by selling junk properties to other foreign investors, who then are stuck with lemons they can’t unload at any price.
The Securities and Exchange Commission formally charged Angelo Mozilo, the former CEO of Countrywide Financial Corp., with fraud and illegal trading this past week.
Countrywide was one of the major players in the 2007 subprime mortgage meltdown that kicked off the current global financial crisis. Countrywide COO David Sambol was also charged with civil fraud, as was Countrywide former chief financial officer Eric Sieracki.
