Signs of a Housing Turnaround

By Money Talks News

Sep 15, 2008 11:38 am

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With the housing market still in decline, many sellers are wondering when the turnaround will finally come. Fortunately, there are a few signs you can look for that will tell you when things are starting to look up.

While all markets are different, it all boils down to supply and demand. So first, check on supply. Ask a local realtor how many unsold homes are in your neighborhood, or do a quick check on a web site like HousingTracker.net. The fewer homes available in your neighborhood, the better!

What about demand? If jobs and populations are increasing in your community, so is demand for homes. Find out if your local unemployment rate is going up or down. Check local job listings in the newspaper or online at sites like Monster and CareerBuilder.com.

Then look at affordability, measured by seeing whether the average paycheck in your area can support the average house payment in your neighborhood. It’s available for free, for most cities. See the National Association of Realtors’ Housing Affordability Index.

In other words, recognizing a housing turnaround is simple supply and demand. Try researching trends in your market and see if you can predict housing prices where you live. Check mortgage rate trend.

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  • Unfortunately, it's unlikely that any lender is going to reduce your mortgage balance unless you're behind in your payments and broke to boot. I know this seems unfair. But consider the mortgage company's position. Had things gone the other way and the house had doubled in value, would you have shared your profit with them? No. So why would you expect the mortgage company to share your loss? You borrowed money to buy a house...the fact that it's now upside down has no bearing on their loan any more than if you'd borrowed to buy a losing stock or to enter the world series of poker. Countrywide lent you money and they expect it to be repaid in full and on time.

    So the question really shouldn't be, "my house has dropped in value...why won't they reduce my mortgage?" It should be "why would any lender be willing to reduce anyone's mortgage?" Answer? (Hint: it isn't out of any sense of moral obligation or sympathy.) It's simply money. Lenders figure that in some cases if they keep the homeowner in the home, they'll lose less money than if they kick them to the curb, take the home back in a foreclosure and resell it.

    Bottom line? Sometimes people who can't meet their obligations get "special treatment." (Although I doubt those who jump through these hoops feel very special when it's all over.) But only because it ultimately benefits the lender.

    And as for the rest of us who happen to be fortunate enough to continue meeting our obligations? We're expected to do exactly that: meet our obligations. Whether the housing market is up, down or sideways. Fair? Hell no. But it's the way of the world. And one reason, btw, that I only borrow when I have to and never more than I absolutely need.
  • AppleScrapple
    I would like to know if there is any one out there who has had success getting out of their over inflated mortgage and written a new more reasonable loan without going into foreclosure. My home is severely upside down and my mortgage company (COUNTRYWIDE) will not help me unless i am late. i would like to stay in my home, but have it at fair market value. Is this possible?
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