So, where are we??

I already talked about how we got here. Go back and catch up if you need to but I want to discuss where we are. The news says we are in the worst recession ever and it will be worse because it is world wide. I am not sure I agree. Indications show we may be about done and on our way out but it is not has bad as it has been in the past. In 1930 over 1000 banks failed in the US and there was no FDIC to protect deposits. in 2008 so far we have had less than 20 banks fail and no money was lost by consumers in the wake because the FDIC did it’s job. That’s good news!!

There are approximately 76 Million households that own their own homes in the US. 30% of them are paid for free and clear. No mortgage on 30% of the homes in the US. That means that about 52 Million households have a mortgage and over 93% are current on their mortgages Over 97% are NOT in foreclosure. That sounds better than the news is telling us, huh?

Of the 3% that are in foreclosure, over 40% are NOT owner occupied. Those come from the large number of so called investors (I prefer to call them speculators) that bought a second home with intent to flip it or use it as a vacation home / rental. They over leveraged themselves, did not have proper reserves and therefore are in trouble with the mortgage company.  Another sobering note is that nationally, about 20% of home owners owe more than the house is worth in today’s market. That is not a great stat but did those folks lose money? Not unless they have to sell right now, they have not. They can continue to live there, make the payment and wait for the market to come back. Remember that article on equity extraction? How many of that 20% took the money and ran? Based on those numbers I would say a good many did so they took their profit early and now have to wait to sell or worse are irresponsible to the commitments they made and will be abandoning their homes and commitments. I am not saying all folks that lose a home are bums and there are times that people have no choice but I would venture to say that is not true in all cases.

I’ll have more later but for now know that the situation is NOT hopeless and that we will work our way out of this. My belief is that we need to grow our economy by doing the right things. Invest, save and make incremental changes in the way we do things. Not gambling on the big win but get our collective heads down, focus and we will win.

As to the housing market, the best thing I can tell you is that “WE ARE HAVING A SALE“. We’ll talk more but prices are down, interest rates are down and there is LOTS of inventory. I know of one deal that is a brand new  house that was on the market for $600K a couple of years ago and is now being sold by the bank. I know it is listed for $459K but the agent tells me $375K will get it done and I have it on good authority that the real number is $345K. It is on a golf course and out in the country for a great lifestyle. It is a ranch on a full basement with 5 bedrooms, 4 full baths and a great kitchen. Come check it out here if you are interested or call me. I am doing my best to get this sort of info out to my folks and I suspect someone will snap this one up. Remember, buy low and sell high? Well, prices are low right now so if you are in a place to buy this is a great time.

Thanks for listening,
Jerry W. Robertson