I apologize for not posting anything since August. I cannot believe how much time has passed since my last post. Moreover, I cannot believe the changes that have taken place since July, not only in my industry, but also in my personal life.My wife and I have had our first child. She was born October 8th and her name is Mara Brandt. I am sure that anyone will understand, we are very proud parents and I am frankly shocked at how much love can be shared in our lives. In addition, I was pleasantly surprised to find out that I could love my wife even more than I had loved her previously. To say that I am a blessed man is an understatement.
With family life thriving and a new understanding of happiness in my personal life, I am back to work and excited about my business and the mortgage business in general. While the past few months have provided many challenges and changes, I have discovered that a few predictions that I made in the past are becoming reality. More specifically, the rise in foreclosure ratings across the country are largely due to defaults on sub prime mortgages that were given to borrowers with poor credit and adjusatble rate mortgages. Couple that with a decrease in property values, for some areas, that reinforces the fact that these buyers could not get out of the situation in which they put themselves in, most unknowingly. I do not wish to assert blame on the buyer solely or on lenders solely. I do wish to state that it is obviously a combination of the two.
The overall real estate market is slumping around the country and the effects are being felt everywhere. In Texas, sales are slower overall, prices remain strong, and in most metropolitan areas prices are still on the rise. Unemployment remains at all time lows with no immediate increase in sight. I think that the most relevant signs of what to expect for real estate to come can be seen from the lack of strength from the U.S. dollar coupled with rising prices, more specifically, "at the pump". These factors are looming very large over the entire economy and will remain a consistent nemesis for the housing market.
On the bright side, real estate in "on sale". You don't need to wait for the after-Christmas sales or New Years sales, in most markets sellers are discounting prices to get out of their homes quickly. Moreover, banks are looking to cut their losses now with hopes to regain profits in late 2008 or early 2009. Now are the times when savvy investors begin to scoop up valuable real estate.
Perhaps a more hidden effect of the "market crunch" is the ability for future homeowners to afford their homes. Lenders are strengthening their guidelines and in nearly all cases, buyers are required to have good credit scores along with some form of a down payment. While some potential homeowners will not qualify as easily as they may have a year ago, it will provide an overall strengthening for future housing markets. Let's face it, we do not want our neighbors to face foreclosure, it will diminish the price of our homes. We do not want neighbors who cannot afford to fix their roofs, or repaint their houses. We would all like neighbors that are responsible, thoughtful, and overall a low risk in all facets of their lives. This creates a sense of goodwill and stability and affords us all the best opportunities. The tightening of standards in my industry is long overdue and is desperately needed. With that being said, I want to thank to those sleazy sub prime lenders, it appears their efforts have paved the way for a better mortgage industry.
