Ever since the housing market crash home values have continued to tumble across the nation. The loss in property values is estimated to be in the billions. The major loser is not the banks and investors, but the private homeowner. Millions of hard working Americans have had to sit by and watch what is the equivalent of the financial grim reaper make its way down helpless homeowner’s stretch. Now when prices have reached rock bottom banks have decided to freeze lending on new mortgages.
The real benefactors of the housing market crash were the ones that helped to created it. It has been two years of finger pointing and there is still no smoking gun that anyone can say started, or caused the housing market crash. There are an endless amount of factors that financial commentators have flooded the media airwaves with. This commentary is just empty words to the millions that have lost their homes. One proven fact is that almost all of the major lending institutions participated in sub-prime lending, and allowed properties to be overvalued for the purpose of increasing the amount of liquid cash that was available at the close of sale.
Now, these investors have sat in the shadows waiting with cash in hand to jump back into the market and swoop up on some sweet deals. There are no shortages of homes on the market ripe for the picking. In many situations these single family homes go for pre 1980 prices. In a just world homeowners that lost their homes would be able to get first pick at purchasing a home that is now well within their means, but that is not the case. Since banks are not willing to lend at this time; especially to individuals who have had a recent foreclosure it is a non-option for the downtrodden.
Once all the smoke clears and millions of Americans have had to suffer through the foreclosure process, they will have to uproot their entire family. There is now the possibility that they can rent their homes back from one of those lucky investors who purchased their home for half of what they owed on it.
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This must be the plan the new administration has for the foreclosure market. Homeowners can’t afford to pay for their homes but they can rent them from the new owner.
.-= Bruce Dietz´s last blog ..Country Living Within The City Limits =-.
Well if the article was written about the Spanish property market I would fundamentally disagree, here the real investors, the professional ones that actually make money bought in 2009, the best deals went in 2009, now people can still get a deal but are having to make much more of a compromise to get that deal.
Real investors dont wait for the market to hit rock bottom to buy and dont wait to the market to hit the top to sell and that is why they have money, a real investor isnt a greedy one.
Placing the blame on investors and ignoring the fact that many homeowners got in above what they could afford willingly (expecting housing prices to climb forever) is, in my opinion, telling a half truth. Sure there are people taking advantage of the misfortune of others, but many of those people were the ones sitting on the sidelines during the period of irrational exuberance, or at least were the ones who paid close attention to the fact that something had to change. The housing crisis was caused by politicians, banks, home buyers, investors, and many others. To isolate one of these parties without laying equal blame on the others is not what I’d call a balanced point of view on this one. Many of the poor homeowners that you refer to are just as much to blame here. It is time we all took responsibility for these problems.
Thanks for pointing out that home buyers are at fault too. I agree. A large majority of homeowners can be blamed for making bad decisions and largely contributing to this downturn. However, there are a large majority of homeowners that share no blame and are facing foreclosure because of a job loss; millions more lost thousands in equity (equity earned before the boom). I’m just making the point that currently it is a better market for investors than for home buyers. There is no one group that can be blamed for the market crash.
Sounds good, Paul. Looks like we’re on the same page here. I just felt like there was some verbage in the post that was a bit biased as though investors were the bad ones here and home-owners were free from blame. Thanks for the clarification!
I agree that the blame, in lots of cases, falls on the shoulders of many people. I do feel sorry for the people who were responsible, but lost their job and their home because of it. I also applaud the investors who were smart enough to wait for the right time to buy and not follow the herd.
As pointed out that there are a lot of variables to the recent downturn and no one entity is at fault. Investors are in a great spot to capture some deals, but as in anything like this, timing is key and some investors may be reluctant to buy after being burnt when things went south the first time.
.-= Team Jodi´s last blog ..1039 Pinehurst Drive, Chapel Hill, NC 27517 =-.
We deal with Investors on a regular basis and the criteria they use to buy property in completely different to that of an individual buyer. an Investor is looking at yields as a percentage of amount of the original investment ie buys for a 100k get 5000 a year rent is gross yield of 5% less costs etc. The reason i mention this is it doesnt matter if the propery is half value if there is no chance or rental income as most investors use rental income to service the debt
.-= Spanish Hot Properties´s last blog ..Why Such interest in Mallorca property =-.
Homeowners really have suffered with a lot of the problems that were started by lenders, who did not hang onto the original loans they had and liquidated them for commissions to end up anywhere. Then with so many banks being bought out and taken over, homeowners were going into default and weren’t sure how to locate their lender, not to mention how to finally contact a loss mitigation department to try and settle their debt.
What’s worse, because an excessive number of these loans changed hands, homeowners found themselves dealing with a new lender that didn’t offer the same assistance as their original lender. These new lenders would not refinance before balloon payments became due because it was simply not part of their policy. This includes the fact that some of these loans were sold to collection agencies, even though they were not in default.