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I’ve been receiving a lot of good information from experienced lenders that I trust.  Everyone really needs to be aware of some drastic changes that will be occurring in 2008.  The sub-prime lending mess, declining real estate market and foreclosures in the past few years has finally starting to “trickle down” and will affect almost all potential home buyers.   In 2008 you will see a lot of changes to underwriting guidelines.  The good news is that FHA loans will be less affected than conventional loans.  The demand for FHA loans will probably increase in 2008.  The guidelines will be more strict.  For example:

*Conventional loan home buyers with a credit score of less than 680 and less than 30% down will see a significant increase in interest rates. 

*Home buyers putting less than 5% down and a credit score of 620 will be ineligible for mortgage insurance.  If you don’t qualify for mortgage insurance then you don’t qualify for the loan.  This is not rocket science!!!

*Mortgage insurance companies will also require appraisers to document if a home is in a increasing, stable or declining market.  If a home is in a declining market then a buyer putting less than 10% down and a credit score of 620 will be ineligible for mortgage insurance.

The problems in the lending market are really starting to take their toll on home buyers loan options.  Again, most of these changes will affect conventional loans and not FHA loans.  In 2008, FHA will incorporate a sliding scale for mortgage insurance rates based on credit score.  This sliding scale system is more of a “reward” for higher credit guide scores than a “punishment”.  As of right now, there are no major underwriting or pricing changes forecasted for FHA loans.  So if you’re a potential home buyer next year, it is now even more important to make sure you use a good, experienced lender.  Contact me if you need a reference for a good lender or if you have any further questions.

HomeBuyer Advocate Mike

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Yikes, times continue to be rough in the real estate market, especially for new home builders & lenders.  Yesterday another good builder in central Ohio closed its doors for good.  C.V. Perry & Co. has gone out of business due to serious financial troubles.

C.V. Perry & Co. was a good, solid builder that had been around for 60 years.  C.V. Perry “folding up” was not as unexpected as Centex Homes leaving the central Ohio          New Build Housemarket last year.  Centex Homes leaving our market was a total surprise to many people.  I’m pretty confident that C.V. Perry probably won’t be the last builder in central Ohio to call it quits or to be bought out by a competitor.

Hmmm, let me guess, maybe Dominion Homes might be the next fatality.  It seems like Dominion Homes has been hemorrhaging cash forever and has had a “ton” of lending problems  (see additional links below).  If you are new home buyer in this market please make sure you are protected.  You need to make sure you fully understand your builders deposit policy.  Don’t risk losing your deposit money.  Contact a real estate attorney ASAP if you have any questions.  Good Luck!

Additional info:

Dominion 5.9 million in red for 3rd quarter

M/I Homes post 21.7 million 3rd quarter loss

Dominion Homes sales drop nearly 25%

Beazer Homes report weak earnings

HomeBuyer Advocate Mike
 

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Forbes magazine recently posted a great article about housing trends in America, “Americas Most Stable Housing Markets”  The article ranks the Top 10 most stable housing markets in America.  The real estate market has been dreadful in the last year.  But, the good news is that  Columbus, Ohio  ranked  3rd on the list.  Even though the State of Ohio & central Ohio consistently rank very high on many of the recent foreclosure rankings list, our area has ALWAYS had a very, stable housing market.  One of the big advantages of living in central Ohio, even prior to the latest downturn in the real estate market, was our stable market.  We’ve almost always enjoyed a solid, decent appreciation rate without the wide volatility swings that many other areas in the nation experience.  

HomeBuyer Advocate Mike

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Great News!  The Federal Reserve (Fed) on Tuesday had a bigger than expected drop in the federal funds rate.  The aggressive drop will really help the local real estate Market Chartmarket.  Lenders in central Ohio now have approximate 30 year mortgage rates in the “low” 6% range.  Many “so called” experts predict additional lower adjustments by the Fed over the next three to nine months.

In my opinion, in 2008 we will see many loan program rates between 5.50% – 5.99%.  The low rates and Buyer’s (slow) market continue to make it a great opportunity to purchase a new home. 

Current homeowners should continue to watch the mortgage rates to see if it would be advantageous to refinance their mortgage.  You can click here to check your local mortgage rates.  If you have questions about possibly refinancing then I would recommend that you contact your mortgage originator/lender or your Buyer agent for more help and information.

HomeBuyer Advocate Mike

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http://www.usatoday.com/money/economy/housing/2007-07-19-existing-home-sales_N.htm

The home sales still continue to be slow across the country and in the Columbus Metro area.  Slow home sales impact Sellers and make it more a “Buyer’s Market”.

This is a very good time for a Buyer in Central Ohio to be purchasing a new home.  Especially a first time home buyer that does not have a home to sell.   Mortgage interest rates are still at low rates.  The State of Ohio has the highest foreclosure rate in the country.

 http://www.dispatch.com/dispatch/contentbe/dispatch/2006/04/07/20060407-A1-01.html

The high inventory of foreclosed homes is a big plus for potential homebuyers.

HomeBuyer Advocate Mike

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Buyer's Resource Realty Services 7100 N. High St. Suite 204 Worthington, OH 43085
614.321.9577

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HomeBuyer Advocate Mike


Representing People, NOT Property in Columbus, Ohio. If you are a home buyer, then you need me to protect you. I can help you get the best price and terms for your next home purchase. You must use a true Buyer Broker! 1.614.805.7607

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