Could The Miserable Housing Starts Be An Indicator Of The Housing Market's Recovery?

Not if you believe everything you read in the press. These writers present only what appears on the surface. Yes, Housing Starts plunged last month. Does this mean the Housing Market is in the toilet?

The government has just released September 2007's Housing Starts data for the country. A "Housing Start" is a new home on which construction has commenced.
= Versus August 2007, starts are down 10.2%
= Versus September 2006, starts are down 30.8%

Headlines are saying that this is bad news for the U.S. economy, proof that real estate is in a tailspin. That the ”nightmare” is ongoing. As usual, the press hasn’t done their homework. If Housing Starts are down, it means that the housing supply will also be down shortly. Add to this scenario, builders who are no longer adding new supply to the housing market, the existing demand for homes are allowed catch up. At this point we see a rebalancing of the Supply and Demand, as home values rise.

The result
= Todays buyers will buy with confidence, realizing the investment value of their purchase.
= As values rise, mortgage lending risks decline and helps more people get approved for more types of mortgages.
= More buyers will be able to get approved for more types of mortgages.
= Rising home values create wealth in the form of home equity. Home prices aren't being supported by the existing demand, which tells us that it's time to cut the supply, and that's what the builders are doing.

So, this is one approach for the media to present a more realistic explanation of what’s current in real estate.

Could The Miserable Housing Starts Be An Indicator Of The Housing Market's Recovery?

Not if you believe everything you read in the press. These writers present only what appears on the surface. Yes, Housing Starts plunged last month. Does this mean the Housing Market is in the toilet?

The government has just released September 2007's Housing Starts data for the country. A "Housing Start" is a new home on which construction has commenced.
= Versus August 2007, starts are down 10.2%
= Versus September 2006, starts are down 30.8%

Headlines are saying that this is bad news for the U.S. economy, proof that real estate is in a tailspin. That the ”nightmare” is ongoing. As usual, the press hasn’t done their homework. If Housing Starts are down, it means that the housing supply will also be down shortly. Add to this scenario, builders who are no longer adding new supply to the housing market, the existing demand for homes are allowed catch up. At this point we see a rebalancing of the Supply and Demand, as home values rise.

The result
= Todays buyers will buy with confidence, realizing the investment value of their purchase.
= As values rise, mortgage lending risks decline and helps more people get approved for more types of mortgages.
= More buyers will be able to get approved for more types of mortgages.
= Rising home values create wealth in the form of home equity. Home prices aren't being supported by the existing demand, which tells us that it's time to cut the supply, and that's what the builders are doing.

So, this is one approach for the media to present a more realistic explanation of what’s current in real estate.

Things Lookin' Up?

Things are starting to look up in real estate from what recent reports and the NAR indicate. It may be a temporary positive glich, but with widening credit availability and low interest rates holding steady it sure does look like a recovery is slowly under way. I’m sure this is no news to anyone in the business. Of course everyone likes a positive attitude...why not?

Conforming loans are becoming very available at historically attractive mortgage rates. There have been adjustments in pricing for jumbo mortgages, and subprime mortgages are being replaced by FHA loans.

One thing that gives the market perspective is the news that 2007 will be the fifth highest year on record for existing-home sales. 2005 was an unsustainable peak. It was overloaded with speculative buyers. These spec excesses have been removed from the market, and home sales are starting to return to normal.

NAR President Pat V. Combs, from Grand Rapids, Mich., and vice president of Coldwell Banker-AJS-Schmidt, said, “Housing is still a good long-term investment, and we’ll be seeing a broad, modest improvement in home prices in 2008. With widely varying conditions, the best advice for consumers is to consult a Realtor® in their area to learn about local market conditions because supply and demand can change from one neighborhood to the next.”

Of course loans in our neighborhood are in excess of double the $417K conforming rate. (Jumbo rates are in the 7.11% range, conforming loans are in the 6.0% range.)
Jumbo loans are a little more problematic than conforming loans.

Only when the creative mortgages experienced in 2005 return (what?), will real estate return. Or, mortgage lenders would be required to follow good faith and fair dealing requirements, with a fiduciary duty toward borrowers.

Anything’s possible.

One man’s opinion.

Who Needs A Partner?

It seems that partnerships are the way of the future. Why? I’m a loaner myself. I sure don’t want to check-in with a partner every time I make a decision.

So what’s the advantage? Businesses—successful businesses— are run like a business even if there are only two partners. There’s a structure to a business. Things get done on schedule, there’s plan, ergo a business plan.

There is a growing trend from Sole Proprietor (SP) to Business Owner (BO). The thought precesses are totally different. Think about it. The SP has only one-on-one thoughts and the possible repercussions there of — “If I do this, I can expect this.”

There is a shared decission in the case of the BO. When a business relationship is established, a business plan is agreed upon. The weakness and strengths of each member are established at the outset. They marketing their business and the value of teamwork.

New business names are beginning to show up, in combo with the parent broker name.
The business functions as a freestanding business, however. How to create a Marketing Plan and structure a new business approach to real estate at: http://www.buildmybusiness.com