My New Blog

According to CNNMoney, fewer homes nationwide are underwater or upside down. This is when an owner owes more on the home than it is worth. This is an all too common occurrence with cars. Many people drive around owing the bank more for their car than what it's worth.

But the public never thought this could happen with homes. I remember when just a few years ago First Charter bank would loan homeowners 125% of appraised value. Wow! No bank anywhere would do that now. Here's the link to the article for more details:

http://money.cnn.com/2010/08/09/real_estate/fewer_underwater_borrowers/index.htm

As home values in Charlotte and across the country stabilize and creep upwards, the amount of homeowners underwater will go down. I'm not an economics professor but this will have a positive cyclical effect.

I had a buyer call me the other day interested in a home listed by our company, Hines & Associates Realty. I asked why he was moving. He told me that he was buying a home via lease purchase and the home was going to foreclosure. The owner was not making the payments on the mortgage.

The buyer told me that he had put over $4,000 down and was supposed to be receiving a partial credit for each month's rent toward the purchase price. I asked the buyer if he realized that all of that money was gone. He said he did.

This is a big problem facing the nation, not just the Charlotte real estate market. Buyers buying homes thru lease purchase and renters just renting homes are being evicted because the current owners and landlords aren't making the mortgage payments.

Newer NC and federal laws give people caught in this situation some time to get out, but the people must still get out. Some banks that have foreclosed on the homes and commercial properties are allowing the tenants to stay for a while but this is the exception; not the rule.

Banks are allowing tenants to stay in other parts of the country where home values and commercial property values have fallen more dramatically than in Charlotte. The banks want to hold the property until the real estate market improves.

Buying a home via lease purchase is not usually the best option. Renting a home should also be limited since you are paying someone else's mortgage. But with either case, an experienced real estate agent knows ways to limit the chances that current owner will allow the home to slip into foreclosure.

John Green

jtg3us@yahoo.com

The media is making a big deal about the downturn in sales with the expiration of the government’s homebuyer’s tax credit expiring. Of course there would be a downturn with the expiration. If an ice cream shop offered free ice cream for a week, the next day the shop started charging for ice cream, sales would be down. This doesn’t mean that no one likes ice cream any longer and the shop should permanently shut down. It simply means that if you liked ice cream, you would go to the shop and get plenty while it was free.

The homebuyer’s tax credit helped buyers get off the fence and buy real estate in Charlotte and around the country. The lull after the credit expired is not a surprise. Sales will stabilize as buyers that need to buy come to the surface with life’s changes – new and expanding families, job transfers, retirement, etc.

Additionally, several months ago, several media outlets complained that the tax credit was ineffective. They quoted surveys that showed that only 1 out of 4 buyers were influenced to buy because of the tax credit.

The bottom line is that the homebuyer’s tax credit helped the housing market, some. Just like the rest of the economy, there is no silver bullet to fix everything. It’s a great time for buyers to buy and it is not impossible for sellers to sell. The world keeps turning believe it or not.

John Green

jtg3us@yahoo.com