On the Move - City2Shore Gateway Group September 2023

On The Move with Gateway Group Real Estate

Do you know someone in danger of FORECLOSURE?
There aren’t many homeowners in the US that are seriously behind in their mortgage payments.  There are some, however.  Most people entering or going through a foreclosure are unaware that they don’t need to lose their house to the bank or even lose money in a “short sale”.  Homeowners in this position should call a realtor, find out what their home could sell for on the open market and use that realtor to sell their house. In the past 2-3 years, some buyers did pay more for a home than their budget allowed, but that doesn’t mean they need to lose money or forfeit the house to their lender in a foreclosure.  House values are still climbing and as bad as inflation is for most of our daily lives, inflation is a good thing when you own an asset like real estate.  Your home value is “inflated”.
One of the main reasons there were so many foreclosures during the last housing crash was because relaxed lending standards made it easy for people to take out mortgages, even if they couldn’t show that they’d be able to pay them back. At that time, lenders weren’t being very strict when assessing applicant credit scores, income levels, employment status, and debt-to-income ratio.  “Now, lending standards have tightened, leading to more qualified buyers who can afford to make their mortgage payments. And data from Freddie Mac and Fannie Mae shows the number of homeowners who are seriously behind on their mortgage payments is declining (see graph below-courtesy of Keeping Current Matters)”


 
Currently, the US has the lowest delinquency rates in history despite what the negative news cycles keep trying to preach. Quotes stating that foreclosures are up 150% might be true, but that statistic is designed to create fear in the market. The fact is if there were 250 nationwide foreclosures, a 150% increase is still only 375 foreclosures.  The actual numbers are extremely low.  In the first quarter of 2023 statistics show that nearly 35% of home purchases were cash (no mortgage) indicating the amount of savings and home equity earnings are still large enough for homebuyers to purchase without a mortgage.
Here are a few other reasons the real estate market is still HOT in West Michigan.
Limited Housing Supply: If there's a shortage of available homes for sale relative to the demand from buyers, it can create a competitive market environment, potentially leading to higher prices and quicker sales.
Low Mortgage Rates: Historically low mortgage interest rates can make buying a home more affordable and attractive, encouraging potential buyers to enter the market and invest in real estate. The US media keeps complaining that interest rates are high; however, they are still below 30-year averages and are not likely to stay as high as they are today. Buyers should not let the interest rate deter you from getting in on a home purchase where you can make more than 8% per year on your investment in some areas.
Steady Job Growth: Positive employment trends and job growth can lead to increased consumer confidence and purchasing power, driving demand for housing.
Urban Renewal and Development: Ongoing urban revitalization projects and new developments can attract both residents and investors, boosting demand for real estate in certain areas.
Desirable Locations: Michigan is known for its beautiful landscapes, vibrant cities, and recreational opportunities. Locations with strong amenities, good schools, and overall quality of life can attract buyers and contribute to a strong real estate market.

Summary: If you are considering or sliding towards foreclosure, don’t be afraid. Call a realtor and find out your options.  If you are a seller, you should be smiling because this is still a sellers’ market and if you are a buyer, the best time to buy is right now. Waiting for rates to drop 1-2 points while the house you want to buy goes up 3-4 points in value is a fool’s errand.  Don’t wait.


If you would like to talk more about your options to sell or buy including timing and values, please feel free to message me for some direction. Gbrown@city2shore.com 1-616-895-8000
Geoff Brown is the Broker/Owner of City2Shore Gateway Group which has offices in Allendale MI. and Byron Center MI. and manages more than 40 realtors who are experts trained to serve in our communities.