March 9, 2010
What Do We See in the Shadows?
| The economy is on the road to financial recovery. It will be a long and hard road, but we are on our way. There are many obstacles that could cause us to break down on this road. None is more important than the concept of "shadow inventory." What is that? These are homes which the banks are not foreclosing upon because they are trying to work out solutions with present homeowners or frankly they don't want to flood the markets all at once and depress prices. How many homes are casting a shadow over the markets? Projections vary, but suffice to say that there are several million homes that will be foreclosed upon in the next two years. That is a lot of homes. It is good news that increased investor demand cited by the John Burns Consulting Firm study discussed in the last section may help mitigate the overall effect upon pricing. We keep saying this and it bears repeating. Real estate led us into recession and it must lead us into recovery. There are many factors that can help "soak" up shadow inventory. The weak dollar is increasing demand from foreign investors. The tax credit is bringing more first time buyers into the market and now move-up buyers as well. Low rates are keeping homes affordable, especially when compared to renting in many markets. Government efforts at modifications are also expected to keep many in their homes. Even builders are helping by bringing less homes to the market. Not one of these is by itself enough to absorb several million homes. But if we put all these factors together, it very well may happen. Keep in mind that all the while, the population of this Nation is rising. This means that sometime in the future there will be growth in the real estate market and our economy. In the meantime, we will navigate the long and winding road. |
| Investors Around the World Arrive
"This could be a once-in-a-generation opportunity for real estate investment," says Arthur Wong, whose Calgary, Alberta-based U.S. Real Estate Fund has invested $5 million in properties in the U.S. Southwest and plans to buy millions more. Buyers from countries like Brazil, Canada, France, and the Netherlands, whose currencies are particularly strong against the dollar, are spending millions on luxury condos in New York City, Las Vegas, and Miami. Foreign buyers also find the warm climates of California, Texas, and Arizona attractive. Peter Zalewski, a principal with Miami-based Condo Vultures, says he has sold foreign condo buyers seven bulk deals in downtown Miami alone, with investors coming from Argentina, Canada, Colombia, Italy, Norway, and Venezuela. It is obvious the investor demand cited by John Burns Consulting Firm in their study discussed in the next section will not be only coming from within the United States, but also from all over the world. Real estate is on sale right now. Source: MSNB |
| The Need for Speed
Another possibility is to propose a leasepurchase deal or land contract to the seller. If the deal is structured properly, both buyer and seller could walk away winners. Source: CNN.com/Money |
| About Cornerstone Financial Mortgage
Cornerstone employs a team of experienced professionals who are committed to providing the highest level of service while fulfilling the varied needs of our customers. We build our business on satisfied customers - home buyers, homeowners, realtors and builders. Cornerstone strives to create value for all our partners - value for our customers, investors, shareholders, employees and the communities where we do business. Bruce Neumann Sr. Mortgage Consultant 215.601.7755 cell Email Me Visit My Website Eric Baitinger Sr. Mortgage Consultant 215.654.6085 office Email Me Visit My Website |
