The real estate market is like a pendulum.
During certain periods, it swings in favor of sellers and then swings the opposite way in favor of buyers.
The last sellers' market constituted a huge swing and the rebound in favor of buyers has been large.
They say one person's disaster is another's opportunity.
The current real estate market exemplifies this in so many ways.
For those who purchased a home in the last two years or so, it is pretty ugly.
Real estate values are dropping, which means many of these new homeowners are paying a mortgage that has a balance due that is more than the home is worth.
This situation, of course, has led to all kinds of problems.
As the market and finances supporting it have corrected, many people are in trouble.
Mortgage loan default rates are up across the board.
For those with bad credit that became homeowners through subprime loans, things are really ugly as you have undoubtedly been reading in the mail.
So, are we past the worst of it all? Sorry, but no.
Things have only begun to get nasty.
For the remainder of this year and through 2008, millions of hybrid and adjustable rate mortgages are going to be resetting.
Even with the recent federal reserve rate cut, most of these mortgages will see increases in interest rates and monthly payments.
It is estimated the average mortgage payment for these loans will increase between 20 and 30 percent.
A great many borrowers will be unable to afford such a bump, which will lead to more defaults, more homes on the market and lower prices.
This recipe for real estate disaster is only a problem for those that own homes and are in trouble.
For those that have money set aside, 2008 is forming up to be the best buyers' market in twenty years.
An axiom of many successful stock investors is to buy when everyone else is selling.
The same goes for real estate and that is about to happen now.
You rarely make big bucks following the herd.
Well, the herd is selling, so you should consider buying.
The potential to buy multiple properties at low prices and ride the equity gains to huge profits when the real estate market recovers is a smart strategy, so wake up and take a look around you to see if any deals are available.
During certain periods, it swings in favor of sellers and then swings the opposite way in favor of buyers.
The last sellers' market constituted a huge swing and the rebound in favor of buyers has been large.
They say one person's disaster is another's opportunity.
The current real estate market exemplifies this in so many ways.
For those who purchased a home in the last two years or so, it is pretty ugly.
Real estate values are dropping, which means many of these new homeowners are paying a mortgage that has a balance due that is more than the home is worth.
This situation, of course, has led to all kinds of problems.
As the market and finances supporting it have corrected, many people are in trouble.
Mortgage loan default rates are up across the board.
For those with bad credit that became homeowners through subprime loans, things are really ugly as you have undoubtedly been reading in the mail.
So, are we past the worst of it all? Sorry, but no.
Things have only begun to get nasty.
For the remainder of this year and through 2008, millions of hybrid and adjustable rate mortgages are going to be resetting.
Even with the recent federal reserve rate cut, most of these mortgages will see increases in interest rates and monthly payments.
It is estimated the average mortgage payment for these loans will increase between 20 and 30 percent.
A great many borrowers will be unable to afford such a bump, which will lead to more defaults, more homes on the market and lower prices.
This recipe for real estate disaster is only a problem for those that own homes and are in trouble.
For those that have money set aside, 2008 is forming up to be the best buyers' market in twenty years.
An axiom of many successful stock investors is to buy when everyone else is selling.
The same goes for real estate and that is about to happen now.
You rarely make big bucks following the herd.
Well, the herd is selling, so you should consider buying.
The potential to buy multiple properties at low prices and ride the equity gains to huge profits when the real estate market recovers is a smart strategy, so wake up and take a look around you to see if any deals are available.
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