Pick up any newspaper across the country these days and you'll see every angle of the gloom & doom befalling the real estate industry. The real news however, is what you won't find in those articles. Doug Duncan, chief economist for the Mortgage Bankers Association, commented in September on the state of the mortage market and dropped some interesting observations that have yet to show up in the mainstream media:
- Thirty-five percent of the homes in the U.S. do NOT have a mortgage.
- Some 94.88 percent of the loans ARE performing.
- The foreclosure problem in this country is really a story about seven states.
- The biggest foreclosure problems are in Michigan, Ohio and Indiana. These are manufacturing states that had horrible job losses. Since 2001, Michigan has lost 300,000 jobs. These states would probably have had problems no matter what the market was doing.
- The other four states -- California, Florida, Nevada and Arizona -- experienced significant overbuilding. Twenty-five percent of the foreclosures in these states are on properties that are held by investors who were speculating.
- Only 25 percent of all mortgages are subprime, and of these, 75 percent are performing.
- In the other 43 states, foreclosures have fallen in 2007 from 2006 (data from Michael Clawson, vice president, Central Texas Mortgage).
So what does this mean for you? If you're in the stock market, "buy now", and the same concept goes for real estate: if you're in the market for a home, don't get caught on the sideline when the fears subside. The best thing to do is meet with your real estate advisor. They can answer your questions and guide you according to your particular interests. Don't have an advisor? Meet the professionals of Prudential Burroughs & Chapin Realty, Inc. and stop by an office today.
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