Monday, February 06 2006 @ 08:57 am UTC
Contributed by: jron
There are so much uncertainty that is surrounding the real estate market. As some investors questioned their market whether they'll still get record market this year, or is stock market an option or will it be just a moderate gains for them?
Investor market is probably the wild card for this year as their status on the market will be relatively unknown.
David Berson, chief economist with mortgage company Fannie Mae, a known lending market, says "We can't find a period when the investor share of home sales has been higher than in the last year," A known fact considering the market's tiwst and turns.
He also added that "However, in the fourth quarter, it looked like investors were starting to step back. We just don't know for certain how far that's going to go." The uncertainty goes on.
Berson also said that "We obviously track the mortgage activity and understand that overall share, but we don't focus on how many homes are being purchased by investors without a mortgage," also added "That could be a more interesting part of the housing picture."
Chief economists David Seiders of National Association of Home Buildeers and Frank Nothaft of Freddie Mac, along with Berson, are all expecting a downturn in homesales for 2006, they all says that the reason would be the issues about the interest rates that has been rising and probably also the upbeat climb of home prices, also mostn prbably the known factor of the investor.
Berson says that "We expect housing activity to drop about 8 percent this year - primarily because of investors slowing purchases," An obvious reason he recalls.
Adding that "And it appears the condo market is slowing considerably. It's no surprise, because that's the type of housing investors most favor; there is no lawn to mow and you don't have to shovel the snow." Metaphorical speaking it's really a downpoint for them.
For he past two years, banking regulators have been on eye to the low down payment mortgages, still known lenders have not yet pree on the other programs to their investors, giving that there questions that whether lenders have crossed the line in extending credit to their clients.
Places with low-employment rate such as Michigan, Indiana, Kentucky, Virginia and Ohio, are tagret for delinquencies and foreclosures were are they are increasing. Predictions on whether improved employment numbers nationally will decrease in it's delinquencies in prime markets were on target.
Nothaft also adds that "Strong house price growth and low interest rates have helped with loss mitigation," Also have in mind that the average home would have at least 7 percent this year, that prediction is still immature as of the moment.
Nothaft said "We expect housing activity to drop about 8 percent this year - primarily because of investors slowing purchases," he added "We are expecting consumer loan delinquencies to be near the lows we experienced in 1999-2001," and also "The exception has been in some FHA and subprime loans where the default rate has been as high as eight times that of prime loans."
In conclusion Berson along with Nothaft and Seiders all predict that there will be nothing much in its market that would push them uptempo for their long-term mortgage and interest rates, unless some kind of market miracle would occur it is still "uncertain".