Will foreclosures collapse 2024 home prices?

2008 saw the systemic collapse of the banking industry. The Dodd-Frank Wall Street Reform and Consumer Protection Act in 2010 put regulations in place to control the exploitation of the consumer by the banking industry. Many mortgage products that were quite obviously unsustainable were eliminated from the market. On the one hand, it became more difficult to borrow to buy a home, but on the other hand these laws created a more sustainable housing environment.    Foreclosures Collapse 2024 GoWpNow and The Warburton Team The results can clearly be seen now. There is low housing inventory because homeowners do not want to sell and lose a low interest fixed rate loan.   Millions of loans in the USA were made with no tax returns to borrowers with low fico scores and fictitious income declarations. These were called “stated income” loans. Banks seduced borrowers with teaser adjustable interest rates which sometimes tripled over three years. Millions of homeowners were stuck with payments that they could not afford. As prices declined, borrowers simply walked away from homes they could not afford.    View Distressed Properties in SoCal     Today the story is completely different. Over 85% of first mortgage home loans in the USA are fixed rate with full income verification in 2023.    According to the Mortgage Bankers Association in the third quarter of 2023 “The percentage of loans in the foreclosure process at the end of the third quarter was 0.49 percent, down 4 basis points from the second quarter of 2023 and down 7 basis points lower than one year ago. This is the lowest foreclosure inventory rate since fourth-quarter 2021.”   The banking industry uses the term “delinquent” for loans 30 days or more and default. The term “seriously delinquent” is used for loans 90 days or more in default. Seriously delinquent loans are at record lows in the United States at the end of 2023.   Why would anyone willfully default on a loan below 4%. If they relinquish their home where will they live? It will cost them more to live in a rental home and they lose the security of homeownership.   View 55+ Communities Homes in SoCal     It’s true that “nothing goes up forever”, but the housing collapse of 2008 was an extraordinary event that had not been seen in the United States since the Great Depression almost 100 years prior.   Real estate prices are cyclical so expect fluctuations based on supply and demand, the job market, affordability by community and the condition of the local and national economy. However in 2024/2025 it seems very unlikely that dramatic price reductions will take place in any urban market where supply exceeds demand. Until new construction dramatically increases the number of available housing units, the demand for homes in most USA cities will continue to exceed supply.    At GoWpNow, we have always believed that homebuyers should focus on stability and well-being through ownership.    If the objective is to create “home” in the long term, then market fluctuations and “investment” thinking should take a secondary role in the home-buying thought process.   Live Customer First Help from GoWpNow:   GoWpNow and The Warburton Team have a dedicated group of licensed concierges standing by to answer questions and help you in your search     Talk to your personal Customer First Concierge or text them questions and comments. We are ready to connect with you now.   Thank you for considering GoWpNow and The Warburton Team as your partner in this exciting journey. We look forward to assisting you in finding the property that suits your needs.   Search All Listings in SoCal    

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Unlocking Opportunities: The Benefits of Purchasing Foreclosure Properties

Investing in real estate is a popular wealth-building strategy, and one avenue within this realm that often piques investors' interest is purchasing foreclosure properties. Foreclosure properties are homes that have been repossessed by lenders due to the homeowner's inability to meet mortgage payments. While this might sound like a grim situation, it presents numerous opportunities for savvy investors. In this blog, we'll explore the benefits of purchasing foreclosure properties. Attractive Price Discounts One of the most significant advantages of buying foreclosure properties is the potential for substantial cost savings. Lenders are motivated to sell these properties quickly to recoup their losses, and as a result, they often list them below market value. This discounted pricing can provide investors with an immediate equity advantage, allowing them to buy low and potentially sell high in the future. Diverse Investment Options Foreclosure properties come in various forms, including single-family homes, multi-unit dwellings, and even commercial properties. This diversity allows investors to tailor their real estate portfolio to their specific goals and preferences. Whether you're interested in rental income, fix-and-flip projects, or long-term appreciation, there's likely a foreclosure property that suits your investment strategy. Favorable Financing Opportunities When purchasing foreclosure properties, investors can often take advantage of more flexible financing options. Some lenders offer specialized loan programs, such as renovation loans or low down payment options, to help investors fund their purchase and any necessary repairs or improvements. These financing options can make it easier for investors to enter the market and enhance their potential returns. Potential for High Returns Foreclosure properties can yield substantial returns when managed and renovated effectively. Buying a distressed property at a discounted price and then investing in improvements can increase its value significantly. Additionally, rental income from these properties can provide a consistent cash flow, making them a valuable addition to an investment portfolio. Opportunity to Help Distressed Sellers While foreclosure properties are often associated with financial hardship, purchasing these homes can also provide an opportunity to help distressed sellers. Some homeowners facing foreclosure are motivated to sell quickly and may appreciate a smooth transaction that allows them to move on from their financial troubles. Investors who approach these situations with empathy can create win-win outcomes for both parties. Lower Competition Compared to traditional real estate listings, foreclosure properties tend to have less competition. Many potential buyers are wary of the perceived risks associated with buying distressed homes. This reduced competition can give investors an advantage when negotiating with lenders and increase the likelihood of securing a favorable deal. Potential for Quick Turnaround Investors with experience in property renovations and market knowledge can often execute quick turnarounds with foreclosure properties. This speed can translate to faster profits and a more agile investment strategy compared to traditional real estate investments that may involve longer holding periods. Conclusion Purchasing foreclosure properties can be a rewarding investment strategy when approached with due diligence and careful planning. The benefits of cost savings, diverse investment options, favorable financing, high returns, the chance to assist distressed sellers, lower competition, and the potential for quick turnarounds make foreclosure properties an attractive choice for real estate investors. However, it's crucial to conduct thorough research, work with experienced professionals, and be aware of the potential risks associated with these investments to maximize your chances of success in this niche market.

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