“…into a snowball effect.”
Karen Mann, a San Francisco Bay area appraiser, said this, and she is talking about home valuation for the purpose of refinancing. A whole article on BusinessWeek today talks about the glum and gloomy outlook for overleveraged home owners.
After all, why would anyone want to refinance, if it wasn’t for the purpose of getting out from under unaffordable payments? OK, so overleveraged owners or sellers have a problem on their hands that puts appraisers in the deflating bubble market in a pinch.
And that’s mostly reason for gloom and doom - according to the broad and prevalent media reports.
Now, why does this gloom-and-doom story sell better than the other one?
You know, the one that talks about how great it is that scores of wanna-be homeowners who had been priced out of the market for years can finally find a nice home for tens of thousands less than even just six months ago?
How come these appraisers aren’t happy to report that lower appraisals spell affordability? How come the media aren’t beaming with stories about middle income families finally moving into their own home with affordable payments that match their actual (read: documented) income?
Buyers - First-time buyers as well as investors looking to build wealth in real estate: This is the time to get excited about real estate. Not when prices are skyrocketting. But when you can buy a rental property that will cash flow now, and build your long term wealth.
In fact, this “snowball effect” of abundant foreclosures is great - if you’re looking to buy now. Get ready to snatch your dream home, or a great cash-flow rental property. Line up your financing and down payment, and get in the game!
2 responses so far ↓
1 Gretchen // Mar 13, 2008 at 7:12 am
We are looking to buy a forclousure in Califonia and actually traveled from Omaha hoping to find a nice home with the current market we thought that we may be able to afford a homet and have it paid for with what money we have saved it would be espaecally nice to find a home in an area with the nice weather conditions with my husband being injured and having permanant disability due to accident at work and our 10 year old daughter having a terminal pregressive disease ….We maybe able to afford a home in a place we never dreamed of livng
2 abc // Apr 8, 2008 at 11:31 am
Yeah, I agree with you there. It was speculation that pumped up prices beyond reality. This is the correction we had to have. Speculation is always risky business and speculators are likely to get hurt. That’s what all this mess is all about. problem is some innocent buyers got in with the hype at the wrong time… Buyers need to do a lot more homework than simply think prices will keep going up on a bull market.
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