Gene Mundt - Let's Talk Mortgages & Real Estate!

     I receive the  Keeping Current Matters  blog each day.  There are very timely mortgage and real estate topics being addressed within these posts.  But today's post, and the thoughts and facts contained within it, may be about the most timely I've seen so far ... and the most important, as far providing sound reasons and facts to support the act of buying a home NOW.  Something we in the industry are very interested and wish to remain educated in.

     The particular post I am referring to was,  "Double Dip or Double Your Money? ...  or Both?"  This KCM post spoke of a survey done this month (March 2011) by MacroMarkets LLC.  It compiled the views and responses of 111 economists, marketing/investment strategists, and real estate experts. 

      Although much of the survey was directed at the Double Dip discussion being bandied about ... these same experts projected within this survey that home prices will see a definite upturn in pricing over the next five years.  And even though the majority of experts saw a cumulative increase of around 10% within that timeframe ... it was mentioned that some were predicting a better recovery, offering increases in housing prices of up to 20% or so by the year of 2015.

      See S&P/Case-Shiller U.S. National Home Price Index provided courtesy of MacroMarkets Home Price Expectations Survey, March 2011 below:

     First of all, let me state ... it was totally refreshing and uplifting to see positive news being reported and projected.  I grow tired of the constant drone of negative surrounding our industry and our future.  I personally believe it perpetuates and elongates the problems.

     But secondly and more importantly, this MacrosMarkets survey and projection provided some evidence that NOW is a good time to get out into the housing market to buy and/or invest, if at all possible.  These experts backed-up our industry's call to action for home buyers.  Support is found through this survey. 

     Keep in mind, should you as a potential home buyer be hoping to reap this predicted appreciation, there are a few important facts that need to be heeded moving forward:

• This appreciation was seen over a 5 year period.  The 10% appreciation shown above would be realized only if you stay in your newly purchased home five years ... or sometime in the year 2015. 
• Buying a home has become a longer term investment than in the past.  It simply will take longer to recoup the costs of buying a home and mortgaging property.  Some experts are suggesting, at minimum, a 5 to 10 year stay in a home.  Taking stock of future plans and employment is important.
• Many mortgage lenders are presently requiring larger downpayments on homes.  At present, you can secure financing for a home with a 3.5% downpayment, but that could be changing in the future.  The COST to secure low downpayment financing is increasing in April.  Time is short ...
• Interest rates are presently still good.  But the markets on which interest rates are based are very skittish and react to what's occurring in the U.S. and the entire world.  Reason to be concerned about interest rates staying low, for sure.  (Don't understand how interest rates fluctuate?  Compare them to your gas station on the corner.  Up in the morning.  Down in the afternoon.  Up again by bedtime.  Both are driven by and sensitive to the same markets and current world affairs.) 
• The demand for good credit scores will not change. 
• Navigation of mortgage processing has begun to be less painful as professional lenders handling transactions have learned the tougher underwriting standards ... and more educated borrowers have disciplined and prepared themselves for the process.  (There has been a learning curve for both mortgage professionals, agents/brokers, home buyers and sellers, no doubt.)
• As housing prices become more stable in more areas, competition will return.  That will mean that home buyers will have to re-adjust their negotiating strategies for homes.  Sellers will still have to have their homes in tip-top shape, but they may no longer have to bow to buyers more unreasonable demands.  Repair demands, lower house prices, negotiating, seller-paid closing costs, move-in colors ... all may become a thing of the past the longer a buyer waits, should the housing market improve. 

     Of course, all of the above is food for thought for home sellers as well as home buyers.  And, should the Double Dip that some experts are predicting occur, in the short-term ... your home might be harder to sell. 

     That concern alone should be enough of a good reason for you to at least think about getting that house on the market soon and talking to a professional agent educated and with the expertise in your area's home market.  If it turns out the "experts" are wrong and there is no Double Dip, you will be that much ahead with your housing/selling decision, be better educated, and have attained peace of mind that much sooner.  

     For those in the real estate industry, take note of the statistics offered within this survey.  Spread the word and good news it supports.  There are signs of healing and that is great news for our potential home buyers, sellers, past clients, investors, and ourselves.

     For home buyers thinking about entering the housing market now ... or in the near future ... this post provides much to mull over.  My suggestion?  If this is YOU and you are thinking of making a housing move ... talk to a professional mortgage lender now.  Get in the game.  Get prepared.  Start the process.  Do what's necessary. 

     The very first steps of preparation for home buying are never going to be wasted actions or wasted time.  Checking your credit.  Reviewing your finances.  Planning for the future.  Getting your budget tuned-up.  All of these are smart efforts to take NOW, no matter your final decision about the timing of buying a home. 

     If you're in the Chicagoland area and wish to talk over home buying and financial options that may exist for you, please contact me today at:  Direct:  815.277.4036.  Cell/Text:  708.921.6331.  Email:  gene@chicagobancorp.com.  Website:  www.genemundt.com.    Thank you ... and good luck!