November 13, 2007
4,400,000 homes for sale...and counting
"Thank goodness the real estate market doesn’t affect me", you think to yourself…or does it??? Some people play music for a living. Others fix cars or build computers. I make my living in the privately-held real estate note business…it’s what I do. Needless to say, real estate isn’t exactly the cat’s meow these days. Do a Google search on ‘real estate’ or ‘housing market’ or ‘mortgage backed securities’ and challenge yourself to find ANY good news amongst all the doom and gloom.
Even if your job is completely unrelated to the real estate market, you are almost certainly being affected by this current correction. Do you own your own home? Is it worth more today than it was in late 2005 – early 2006? There’s a good chance it’s not. Do you see more “For Sale” signs around your neighborhood than you ever remember seeing before? Are these houses selling or just sitting?
It will take time to fix this mess. According to the National Association of Realtors, at the current existing-home sales rate of 5.04 million units a year, it would take a full 10.5 months to sell the 4.4 million existing homes now on the market. How can a homeowner desperate to sell wait almost a year before selling? Most can’t. They lose the house to foreclosure, or they drop their asking price until they can find a buyer. Next thing you know, the burgeoning equity you had in your home two years ago has all but disappeared because your neighbor just sold his house for 25% less than his original asking price.
As housing inventories increase and buyers find it more and more challenging to get financing, I predict seller-financing will take a more prominent role in how buyers and sellers structure their real estate transactions. There is a home for these seller-financed notes in the secondary market – sellers don’t have to hold these notes to term in order to get paid out.
If you currently hold a seller-financed real estate note and are a little anxious about the way the housing market is trending, give us a call and we’ll talk about your options. I make my living in the note business…it’s what I do. How can I help YOU?
Our efforts stay focused on note holders. If you are a note finder, a note
broker, or anyone other than the actual note holder, please do not contact