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Summer 2007 Special Edition from the FDIC - 51 Ways to Save on Loans and Credit Cards
Here is an excellent, common sense report that everyone should read; it’s not just about real estate loans, but loans of all kinds. Click here for the full report.
Interesting News from the DFW MLS
At the end of April the Dallas Fort Worth Multiple Listing Service (North Texas Real Estate Information System) had a few units shy of 53,000 residential properties for sale; up 10% for single family, and 17% for condos and townhouses for the same time a year before. Ouch! for sellers. Great! for buyers.
But wait! There’s more. Not all good deals are really good deals for buyers. Some are not good deals at all. Buyers MUST have a very experienced agent on THEIR side. Here’s what I mean: Is a podiatrist a medical doctor? Yes, a DPM goes through a four year medical program. Would you want a podiatrist to operate on your brain? Of course not; that’s not their specialty. Then don’t buy a “good deal” from an agent with little experience; it might turn out to be a bad deal. This is the time to get REALLY good deals.
Call me; I’ll show you how.
Maurice Dubois
The Housing Wiz
Bad News for Some; Good News for Others
It’s interesting that for almost every bit of bad news, there’s a bit of good news. Look at all the poor people who are losing their homes to foreclosure. That’s the bad news.
Where’s the good news? It’s on the other side of the coin; it lands on those buying the foreclosed properties. Prices of foreclosed properties are low, and getting lower. Banks are taking a bath; many sub-prime lenders have already drowned in the bath water. There are bargains, and there will be more and better ones during the coming months and years.
I’m not sure the buying opportunities will be as juicy as the late 80s and early 90s, but they will be almost as good. It’s a great time to buy a home to live in, or an investment property. Call us for buying ideas.
Maurice Dubois - The Housing Wiz
Plenty of New Homes Available
Steve Brown reports in the Dallas Morning News that the Dallas/Fort Worth area has almost 12,000 new homes ready for new owners. That’s great for buyers; but it’s not so good for home builders, or for sellers who MUST sell.
Some builders are pulling back on the number of starts; some bankers are forcing builders to pull back. Young home builders won’t remember the carnage in the early 80s, so they might continue to add to inventory and lessen their chances of selling at a profit. Seasoned builders will pull back; however, large builders have a hard time stopping the thousand ton locomotive they’re driving; they have to cut back, but they can’t stop.
The existing home inventory is still flush with tens of thousands of available properties. All of this makes it a wonderful chance to pick up a bargain new home. If you do it on your own, you won’t have value information that’s essential to getting a good deal; you also won’t know who are the best builders, the best designs, and the best deals within specific areas and subdivisions.
Give us a call for expert help.
The Housing Wiz
Foreclosures Up Everywhere, Including Texas
Of the top 17 cities in home foreclosures, Texas has four. The third quarter of 2006 put Detroit number one and Dallas number five. Fort Worth/Arlington were in 7th place, San Antonio number 11, and Houston number 17. Ouch!
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Rank
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Metro area
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Q3 2006 total
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1
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Detroit-Livonia-Dearborn, Mich.
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10,316
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2
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Fort Lauderdale, Fla.
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8,431
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3
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Denver-Aurora, Colo.
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9,825
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4
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Miami
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9,380
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5
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Dallas
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13,422
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Austin came up 26, and El Paso 49. Chicago was number 19, but it had the most foreclosures of any: 16,155 total homes taken from their owners.
The chart above shows the rankings for the top five foreclosure cities. I’ve been in housing almost 42 years and I’ve never seen so many crazy loans made with so little borrower equity going into the houses. So it would not be surprising to me to discover in a year or two that 2006 was just the tip of the iceberg.
After peaking at almost 51,000 residential listings in the MLS in September, we’re down to almost 48,000 at the end of November. Unfortunately, the lower figure for November is still 9% higher than November of 2005. The good news is that the Dallas/Fort Worth market probably won’t get slammed as we’ll see in areas where they had ridiculous price increases. Our price increases have not kept up with the real rate of inflation; in some cases, they’ve not kept up with the phony inflation numbers we get from the government.
The Housing Wiz
Texas Cities - Large and Fast-Growing
Texas cities were in the top ten most populated in the country for 2005. Houston was #4 nationwide with over 2,000,000 population; San Antonio with almost 1,300,000, and Dallas with more than 1,200,000. For Dallas, the figure is a bit deceiving because the metropolitan area includes not just Dallas, but Fort Worth, Arlington and Plano; that’s four cities of the ten largest in the state. But there’s more. When you consider other large suburbs like Garland, Irving, Mesquite, Grand Prairie, and Carrollton with over 100,000 each, plus many others with tens of thousands each, the DFW Metropolitan Area comes in at about six million population. Fort Worth was number one in the country for growth percentage from 2000 to 2005 at 15.3%. (Figures from the October, 2006 issue of Tierra Grande - Journal of the Real Estate Center at Texas A&M University).
Will the housing bubble pop here? It could; and it might just let off some air; and perhaps the DFW area is growing so fast in population that we have no housing bubble. Overproduction by builders might simply keep prices stable.
The Housing Wiz
Interesting New Statistics
The statistics for August from NTREIS has interesting information. The total number of residential listings for the end of July had crept up to 51,123. At the end of August the number moved down slightly to 50,579; however, this number is up 10% when compared to a year ago. Sales of single family homes were down 8% compared to a year ago. The average price of a single family home was up 6% to $203,186 when compared to a year ago, condos were up 12% to $168,904.
While the bubble is beginning to pop on the west and east coasts, we are having a slight leak in our bubble. Do we have a bubble? I think there might be two answers.
The first answer is that we probably have a bubble in new homes. There is not one day when we don’t receive an email from some builder with large incentives for agents and buyers. That’s a good thing for agents and buyers; not good for builders. One of the project managers of a subdivision where I’ve sold several homes this year in the $150,000 to $200,000 price range told me at a meeting the other day that they were increasing their production from 4-6 starts per month, to 30 houses per month for September, October, and November. That’s a hefty increase.
The second answer is that there might not be a bubble in the used house sector. Yes, inventory is high, but there are a lot of folks moving to our area, and if the average price of a single family home has only increased 6% in one year, that’s probably not in keeping with the REAL rise in inflation (after you consider that the government leaves out or completely deflates “inconsequential” items like fuel, food and housing).
Some of the inventory increase is coming from foreclosures and houses placed on the market by folks who cannot afford the payments after taking on Adjustable Rate Mortgages (ARMs, whose payments have been rising), or too much overall debt. One of our people was at the Tarrant County Courthouse last Tuesday doing a foreclosure. She said it was a real carnival: lots of sellers, buyers, and noise; they couldn’t all fit on the courthouse steps.
Are there some great bargains now? Some; but there will be more later. I looked at a little investment house in Arlington yesterday. The owner owes $40,000. She had received an offer of $35,000 from another investor - one of the large franchises who advertise to buy Ugly houses. Their offer was too high as the house was worth no more than $20,000 - that seller is in trouble. We did pick up a couple of houses recently; one for $17,000 and the other for $23,000. Both will sell between $65,000 and $75,000 when we’re done with the rehab work; however, we might just rent them and keep them as investment properties.
I should clear up something here. Buying a house to rehab and resell is not investing; it is speculating; it is a business like buying a dirty car, cleaning it up and hoping to resell it for a profit. Investing is buying a property to rent out; it will provide income each and every month.
The Housing Wiz
Listings Up
NTREIS statistics again were indicating that this real estate market is becoming a Buyers’ Market. There were 49,901 residential listings in the MLS at the end of June. Every day we receive offers from builders that show an excess of new homes. Just this week one builder was offering a 7% commission to agents who sell their properties - buyer agents typically get 3%. In addition there were discounts as high as $25,000 for buyers.
When you see dark clouds in the horizon, and they’re coming at you, it’s a good indication that a storm is coming your way. I see dark clouds in the horizon - and a lot of opportunities for SAVVY investors.
We’ll have news of more real estate seminars in the future. We don’t promise to make you rich quick, but we will show you how to become rich slowly as a savvy investor.
Listings Up, Sales Down
NTREIS statistics for May are interesting again. Total residential sales for May totaled 9,021; that’s good because it’s over 9% better than a year ago. However, total listings in the MLS moved up to 48,943 which is 5% greater than a year ago, and over one thousand properties more than the month of April.
We work with banks listing their REO (Real Estate Owned) properties, including the VA acquired properties. We have a good number of properties that are not yet on the market, and I’m sure most other agents working with banks have the same situation. That means there are a lot of houses that will be added to inventory.
Since we buy and sell houses through our investment companies, we get numerous calls each week from people selling out of necessity. Many of those properties will go through the foreclosure process and end up in inventory. I’ve not seen as many people in trouble on their loans for a couple of decades.
The typical seller is either not seeing great price appreciation from a year or two ago, or is literally getting beat up in the selling process. There is one consolation for sellers. If they are buying another property in this market, they get to beat up the seller of their new home, whether the seller is an individual, a bank, or a new home builder.
This is NOT the time to work with an inexperienced agent. I’ve talked with several sellers recently who overpaid for their houses - existing as well as new houses.
Call us for buying and selling information and expert help.
The Housing Wiz
Listings Up, Sales Down
The North Texas Real Estate Information System (our local Multiple Listing Service) reports that total residential listings (homes and condos) were at 47,812 at the end of April. That’s almost 2,000 houses more for sale in the Dallas/Fort Worth area than for March, and higher than a year ago. Add that to the new homes completed and available and we are right there on top, or close to the top, of any metropolitan area in the country.
Sales in April were 13% down for single family homes - ouch! Since we work with lenders in managing and listing their foreclosures, we like to keep up with foreclosures that are listed in the MLS. The numbers are increasing every month.
What does all this mean for your home’s value? Probably that it won’t increase any more than the rate of inflation, if that much. That doesn’t matter if you won’t be selling any time soon.
What does it mean for investors? That there will be some bargains in the near future - if you know how to pick them.
The Housing Wiz
Available Listings Continue to Climb
The number of listings in the Dallas/Fort Worth MLS continued to climb, although at a flatter rate. The total residential listings at the end of March stood at 45,937, up from 30,315 at the end of March, 2002. Builders keep building at a fast pace, which keeps the number of existing home sales down.
It doesn’t look like the Metroplex will be spared from the coming real estate bubble deflation, but from the looks of the MLS statistics our bubble won’t pop as will surely happen in hot markets.
One thing to think about, though, is that accelerating inflation could force everyone - everywhere in the country - to rush out of dollars and into assets, including gold, silver, and real estate. Inflation could flatten the point of the pin that would puncture the housing bubble. Stay tuned; one way or the other, things will get interesting because The Fed will get stuck more and more between a rock and a hard place as a result of dollar overprinting.
The Housing Wiz
FREE Real Estate Seminar Scheduled
Our first Real Estate Seminar is scheduled for May 18 at 6:00 p.m. In a grass roots effort to help people make informed decisions regarding home purchases, sales, and investments, we are offering the seminar at the beautiful new Cedar Hill Recreation Center. The Seminars will be offered by the local financial real estate advisors of Dubois Real Estate—seasoned veterans in the field for over 40 years.
Real estate transactions are some of the biggest financial decisions in a person’s life, and they have the potential to affect your financial stability for years to come. Due to an alarming trend of predatory lending and “get rich quick” investment schemes, we have prepared a series of FREE seminars to inform local residents, and untangle the confusing issues regarding real estate sales, purchases, and investment.
Seminar Topics Will Include:
- Buying
- Selling
- Investing
- Home loans
- Refinancing
- Prudent financial decision making
- Sound investing strategies
- Cautionary market information
- Other topics regarding real estate and finance applicable to today’s consumer market
Seating is limited, so please call Deirdra at our office and reserve a spot (972-299-2233).
John Dubois, The Housing Wiz Assistant
Investing vs. Speculating
I spoke with an “investor” recently who was looking to buy houses in the $300-$400,000 price range. He explained that he was “approved” up to $800,000. I asked several questions to determine if I could help him. I wanted to know what he did with the houses once he purchased them. He explained that he would buy them at a deep discount and resell them for a profit; he was looking for new houses.
I asked what kind of discount he needed, and he said that it had to be about 65%. I never say never; however, I’d say “quite unlikely” to his line of thinking; a line I hear several times each week. In the first place, he is not an investor; he is a speculator. True investors put their money into an enterprise so they can receive weekly, monthly, or yearly income from that investment. Real estate that has a low amount of leverage is one example. It pays a monthly return while holding the value of the investor’s money - with a lot of safety. Speculators buy something hoping to sell it at a higher price. Most stock investors are really speculators. They put their money in stock that does not pay dividends, hoping to sell their shares for more money than they paid for them. Buying a house at a huge discount to sell it for a profit is speculating.
His second flawed assumption is that brand new houses - and used houses in very good condition - are available at 65 cents on the dollar. You can buy houses at a deep discount, but be prepared to do major rehabbing. Is it impossible to find a new house at 65 cents on the dollar? No, of course not. What are the current probabilities in the Dallas/Fort Worth market? My guess is .00001% - or pretty slim.
The “guru mills” are churning at a rapid pace. They are turning out real estate “investors” by the thousands. Don’t be fooled by the hype and great sales talk if you decide to buy someone’s program for getting rich in real estate. Ask the gurus how many deals they do each month or year. Ask yourself this question, “If their method of real estate investing is so great, why are they teaching it instead of doing it? Is it possible that there is more money in selling tapes, books, and seminars than there is in doing their brand of real estate investing?”
This is NOT to say that you cannot make a lot of money investing in real estate. But this is the type of market where knowledge and caution are of prime importance. You might want to start with my upcoming book
How to go Broke Investing in Real Estate
Unless You Read this Book
Investing for the Long Term, with Minimal Risk and Maximum Profit
The theme of the book is to buy at a discount, avoid risk, maximize profit, and move away from the “investing crowd.” It will guide you to becoming a smart investor; it does not promise to make you rich overnight. I hope to have it published later this year. If you live in the Dallas/Fort Worth area and would like a prepublication manual of the book, give me a call (cell 972-814-7391). I’ll get you one for the cost of printing and postage.
The Housing Wiz
Rates Inch Up Once More
The Fed raised rates a quarter point again this week. The Fed is getting nervous, NOT because the economy is overheating, but because the dollar is getting progressively weaker. As of yesterday, the U.S. public debt stood at $8,198,626,872,332.20. That’s a tad over 8 TRILLION; of course, that “tad” is almost 200 BILLION. Yesterday’s figure is $15,488,680,875 (as in 15 BILLION) higher than THE PREVIOUS DAY.
Raising rates does not stop the overspending; but it tells the world that we are slightly concerned about the dollar dropping in value and we are willing to pay a little bit more to those who loan our country money - it’s actually a bit more complicated than that, but you get the point. The slight rise in the Fed rate will eventually trickle down to real estate. A quarter percent might not be much, but a home loan of $100,000 at 6% pays off at $599.55 per month. That same loan at 6.25% has a payment of $615.72 per month; that’s a $16.17 difference, which is $5,821.20 over the life of the loan.
How might that affect you? If you need to sell, you should do it soon. The higher the interest rates go, the lower home prices will come down. If you want to buy, the lower the rates, the lower will be your monthly payment. The market still favors buyers, so buying now makes a lot of sense. If you have questions on selling or buying, give us a call.
The Housing Wiz
Price Right to Sell Fast
When you price a house correctly, you can expect to sell it quickly. A client called a couple of weeks ago and asked us to list an investment property he had owned since the early 1980s. It needed work, but he was tired of dealing with it and wanted to sell it without additional effort on his part.
He priced it right, using data we gave him and a suggested asking price. He signed the listing agreement on January 17 and that same afternoon we had the first purchase offer - above asking price. Within three days we had received a half dozen offers, so we advised the potential buyers’ agents that we would take their highest and best offer through January 26 at 5:00 p.m. In all, we received seven cash offers and one offer requiring financing. He opted for the highest cash offer even though the one requiring financing was the highest.
The house sold fast, for more than the asking price. This is proof that the market will always set the price, whether the house is priced below, at, or above its true value. The only difference in how it’s priced is how long it will take to sell. A house that’s priced below market value always brings more than asking price, quickly; and a house priced above market value eventually sells for market value.
The Housing Wiz
Gold and Silver Soar
We watch housing news with a direct view; on the periphery, we look at all types of markets. Unless you’re into commodity trading, you might not have noticed that gold and silver are soaring, along with other metals, base and precious. There is a lesson here for housing. While real estate prices have gone ballistic in some markets, they have remained relatively stable in the Dallas/Fort Worth area. What does that mean?
For one thing, we have a lot of builders building a lot of houses, at moderate cost - in comparison to existing houses here and to all housing in some overheated areas of the country. But costs are inching up for builders for the same reason that the cost of metals is up. It’s called INFLATION. As we read in The Daily Reckoning, “In the latest reported week, more than $25 billion was added to the nation’s money supply. If this were to continue, it would add more new money in 18 months than the present value of all the gold ever mined.” That little tidbit spells INFLATION.
An inflating money supply (our money is paper, nothing more, nothing less) means less value to the paper and more value to almost everything else that paper buys. That’s gold, silver, and the materials to produce houses, including the land on which they are built. Because of the fact that our houses are not locally accelerating rapidly in cost does not mean that real estate is not a good investment. Sooner or later builders will raise prices enough to make a huge difference in value for the existing housing stock.
Here are some suggestions:
- Buy Gold - just a few Krugerrands will be a wise store of value
- Buy Silver - plain “silver rounds,” in one ounce size, currently under ten bucks each
- Own at least one rental house
Want to know how? Call us.
The Housing Wiz
Good Deals From Builders
We probably have more builders putting up houses in the DFW area than almost anywhere else in the country. Some builders have great plans and some very good deals, especially at this time of year. I spoke with one sales rep in Cedar Hill yesterday. His builder has some of its homes discounted almost $20,000. The homes are in the $150,000 to $200,000 price range.
Great plans, super discounts, and one of the best subdivisions in the Metroplex for that price range. If you’ve been looking for a new home, this is a real sleeper. If you already have a house there are ways to move up quickly and painlessly. Give us a call for details, and take a look at some of the plans we’ve included here.
The Housing Wiz
Uncured Concrete
I’ve kept track of construction on some of the new subdivisions; of particular interest to me was the concrete work.
The most critical time for concrete curing is the first few hours after it is poured. It must be kept as close to 100% humidity as possible. If humidity level drops below 80% the hydration and curing reaction can actually stop. If that happens, the concrete might only achieve half of its designed strength. Curing means keeping the concrete wet; you do that with plastic covering or by applying a coating. It appeared that none of the concrete was being cured.
Foundations and driveways don’t fail immediately, so it’s not a problem for the builder when they do so a few years down the road. They are a big problem for the home owner some time in the future.
We have a lot of construction experience. If you plan to buy a new home, we’ll help you get the best available; at no extra cost to you. Give us a call.
The Housing Wiz
The Dangers of Real Estate
Real estate would seem to be one of those professions that is ideal when it comes to a lack of danger for practitioners. We talk with nice sellers and buyers on a daily basis. We help people solve many challenges. What could be safer?
Alas, there is a dark side to real estate. According to the National Association of Realtors , on average one real estate agent is murdered - on the job - each month in our country. Real estate professionals who deal with strangers on a daily basis are prime targets for thieves, rapists, and killers.
Anyone selling a house on their own is subject to the same problem: becoming a victim. When you hire us to market your house, we not only take on the marketing role, but we take the danger off your back and put it squarely on ours.
Here’s something else we provide: answers to any real estate questions you might have; and the answers are absolutely FREE. Want a FREE online valuation of your home? Click here, it’s FREE, with no obligation on your part.
The Housing Wiz
Higher Interest Rates Means Trouble for Mortgage ARMs
A large percentage of the contracts coming into our office are tied to zero down payment loans. We also see many people buying houses with Adjustable Rate Mortgages (ARMs). ARMs are great for qualifying to buy a house; generally the loan starts off very low, and then it changes according to the way the loan is structured. Rates on the loan change depending on the interest rates currently charged according to an index of interest rates set forth in the loan documents.
The problem with ARMs is that we are still at a very low interest rate period. Because of inflation and the great need for borrowed money by individuals, businesses, and governments, there is virtually zero chance that interest rates will go down or even continue at their current pace. In other words, there is an almost 100% chance that rates will continue heading up. That’s very bad news for people who have adjustable rate mortgages.
I have talked with a good number of homeowners lately who stand a chance of losing their house because they have zero equity - they bought with zero down payment - and their loans are no longer affordable because of higher payments due to interest rate increases. With zero equity they cannot sell their houses unless they go to closing with a few thousand dollars to get rid of the house; most can’t afford to do that. And since they can’t afford to make the payments, they are between a rock and a hard place.
There is help available for some of these homeowners; but they have to act fast and certain conditions have to be present to allow them to back out of their predicament. Often a refinance is either impractical, or actually impossible.
Give me a call if you have questions about your ARM loan.
The Housing Wiz
An Interesting House Auction
I went to a house auction today, hoping to buy a house that our crew can rehab. The house had been foreclosed by a bank (DCAD shows title in Wachovia Bank), and it had been on the market for about 7 months prior to the auction. The bank had been firm on their asking price of $41,000; apparently they figured people would get bidding fever at the auction and they would get more for the house. After coming up with an accurate market analysis, I figured that the house could sell in like-new condition for just short of $70,000.
Since we’re constantly making offers on Bank REO (Real Estate Owned) properties, I figured this little 3 bedroom, 1 car garage house with 900 s.f. of living area would be rough; and it was quite rough. The neighborhood is very neat and clean; all the houses are modest in size.
I had not been to an auction like this one in several years. The auction was held on site; a condo in North Dallas was auctioned as well. I don’t like to go to an auction where only one or two properties are available because it’s not an efficient use of time; however, it’s good to see how people are bidding them in our current market.
After inspecting the property I determined that I would bid no more than $23,000; that would put my cost at $25,000 after the auctioneer’s fee was paid. I really thought that some novice investor would pay more than what the bank had originally asked for the house on the MLS listing. I was pleasantly surprised. There were no fools among the 15 bidders.
Unfortunately, I was outbid; the house went for exactly $31,000, which cost the buyer about $33,000. My guess is that the bank probably had offers equal to, and perhaps just slightly above the high bid when the house was on the regular market. I’m guessing we’ll see lots more auctions in the coming months and years.
The Housing Wiz.
Trouble and Opportunities on the Horizon
I ran a CMA (Comparative Market Analysis) for one of our clients today, on a fairly new home in one of our southern suburbs. The particular property I was comparing has a little over 1,600 square feet; it’s a 3-2-2 brick home that’s about 3 years old. I looked at similar houses in the subdivision and came up with about 5 houses that were for sale, 9 houses that had sold and 3 houses whose listings had expired in the last 6 months.
The prices for the Active listings were from about $90,000 to mostly over $110,000; the highest being $122,000. All of the houses that had sold were foreclosures except one that was sold by an investor; all of the Sold listings had gone for $83,000 to the $95,000 range; the investor house had sold for $102,000. The 3 Expired listings had been on the market for around $115,000 each. The builder of the subdivision is a large, national company, and it is still very active in that location. It is selling houses in the $110,000 to $130,000 range.
In a nutshell, here’s the interesting scenario: Houses for sale average around $115,000; houses that have sold average around $90,000, and most had been foreclosed; houses whose listing expired averaged around $115,000. The builder’s houses average around $120,000. I should say that this is not the only case like this that I’ve studied recently; there are lots of similar examples.
What’s the lesson here? There are several. For one thing, if you’re buying a new house, you need professional help. It’s a mistake to go to the builder’s model home without someone on YOUR side, who understands construction and the market - we can do that, and there are a few others, but we would hope that you let us help you.
Lesson number two is that you can buy an almost new house for a lot less than a brand new house. And guess what? Even if you don’t get a discount, you can buy an almost new house even if your credit score is zero and you have no verifiable income - you’ll need $3,000 to $5,000 cash, and I don’t know anyone else who can do it as well as we can.
Lesson number three is that this is only the beginning of some REALLY GREAT OPPORTUNITIES in real estate; opportunities that we have not seen in almost 20 years. Whether you want to invest, or just want to get a great deal on a house, you MUST sign up for one of our FREE seminars. Please click here for more information.
The Housing Wiz
Real Estate in Other Places
Many places in the world do real estate much different than we do in the U.S. Take India, for example. Sala Kannan, in The Daily Reckoning, reports some interesting figures about that up and coming, very populous country (they’ll probably hit one billion population by 2020).
In India, Sala reports, the ratio of the total value of mortgages to the Gross Domestic Product is only 2%, whereas it is 52% in the United States. That means in the United States, for every $100 we produce, we owe $52 as mortgage. Indians, however, owe just $2.
Has Indian home buying sent prices through the roof? Not at all, because over the last 10 years, real estate prices have almost remained the same in India - except for a few large cities like Bombay and Bangalore. We have a different situation in this country. Our median real estate prices have risen nearly 15% just in the last 12 months. Wow! Actually, repeat after me: inflation.
Indian interest rates are 4.3%, an 18% decrease from 2001; yet, Indians are not taking out mortgages just because rates are low as we’ve been doing in this country. Indians are using higher incomes - which have increased nearly 100% over the last 10 years - much more than lower interest rates to buy homes. That means that the Indian housing market is not thriving on an artificially propped-up fiscal structure as is the case in the U.S.
The Indian real estate market will probably continue to expand in a sensible manner. But what about ours? Ours will be very interesting. We’ll probably see an increase in foreclosures, some great opportunities for those who know how to take advantage of the “deals”, and some current homeowners will be forced to rent from those who are able to take advantage of the situation.
The Housing Wiz
Swift Hurricanes and Slow Retirement
The buzz during the past few weeks has centered around hurricanes. Today we wait for another one to disrupt some people’s lives. But hurricanes come and go in a relatively swift manner; however, retirement comes faster than we wish, and for some it lasts for a long time. There will be three types of retirees:
- Those who enjoy every minute of their retirement because they planned ahead and retired in comfort with plenty of passive income.
- Those who just manage to get by; they had a weak retirement plan.
- Some will suffer and struggle; they will rely on the government’s Social Security Program.
I bought my first investment house over 30 years ago; it was a good one, and it proved to be a very profitable deal; I sold that house and now I wish I’d kept it as it would have kept on giving for many decades.
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