Real Estate - The Non-Existent Move-Up Market
The government has done its best to make it easy for first time home buyers to get their first piece of real estate. With the tax credits, low interest rates, and low housing prices, the first time home buyer has a major advantage over anyone that would like to move up from the home they are currently in.
What Stalled the Move-Up Market?
First of all, the incredibly stringent credit requirements are not allowing too many to qualify for any kind of loan. Those that can qualify can not get the kind of interest rates that the first time buyers of Parc Komo showflat location are allowed. Still another stumbling block is that a chunk of the ever-disappearing profit from the sale of their first home would have to be invested in the second to qualify.
At the end of 2007, the housing industry had a sure supply of money. When Freddie-Mac and Fannie-Mae had their problems, then Wall Street took a dive, private investors pulled out of the mortgage market almost immediately. Although the government jumped in to bail out Freddie and Fannie, they have not fixed the jumbo market or loans over $417,000.
This has created a serious ripple affect. Since those that want jumbo loans can not get them and move up to the next level of housing, those that want to move up to their level also can not. There is now a clogged market.
Problems Current Home Owners Face
So what are the problems that current home owners face in L.A. and all over the nation?
· Homeowners are upside down in their homes. In other words, because the economy went down the toilet since they last financed their home they owe more on it than it is worth. This prevents them from selling or refinancing.
· Americans all over, and California being the fifth highest, are unemployed. Not only can you not secure financing when you don't have a job, but who would want to?
· Because of the lack of jobs, people are falling behind in all of their bills and those that otherwise had outstanding credit are finding their credit score dropping at a phenomenal rate. Poor credit again means no financing.
· Because of the unstable economy, even those that are employed and have been able to maintain their credit are afraid to make any sudden moves because no one knows what is going to happen tomorrow.
Today, it's not just the million dollar and more homes in Los Angeles that are staying on the market for an infinite amount of time. Those homes have notoriously been slow movers. Unfortunately, now any home that does not qualify as a first time home buyer's target market is likely to remain in the listings much longer that its owner would like. Foreclosures have become the flavor of the day, and the realtors that are seeing the most action are the ones that specialize in these. Unfortunately, foreclosures are not limited to those that are in low end housing. It has hit nearly every level of housing to some extent.
What Stalled the Move-Up Market?
First of all, the incredibly stringent credit requirements are not allowing too many to qualify for any kind of loan. Those that can qualify can not get the kind of interest rates that the first time buyers of Parc Komo showflat location are allowed. Still another stumbling block is that a chunk of the ever-disappearing profit from the sale of their first home would have to be invested in the second to qualify.
At the end of 2007, the housing industry had a sure supply of money. When Freddie-Mac and Fannie-Mae had their problems, then Wall Street took a dive, private investors pulled out of the mortgage market almost immediately. Although the government jumped in to bail out Freddie and Fannie, they have not fixed the jumbo market or loans over $417,000.
This has created a serious ripple affect. Since those that want jumbo loans can not get them and move up to the next level of housing, those that want to move up to their level also can not. There is now a clogged market.
Problems Current Home Owners Face
So what are the problems that current home owners face in L.A. and all over the nation?
· Homeowners are upside down in their homes. In other words, because the economy went down the toilet since they last financed their home they owe more on it than it is worth. This prevents them from selling or refinancing.
· Americans all over, and California being the fifth highest, are unemployed. Not only can you not secure financing when you don't have a job, but who would want to?
· Because of the lack of jobs, people are falling behind in all of their bills and those that otherwise had outstanding credit are finding their credit score dropping at a phenomenal rate. Poor credit again means no financing.
· Because of the unstable economy, even those that are employed and have been able to maintain their credit are afraid to make any sudden moves because no one knows what is going to happen tomorrow.
Today, it's not just the million dollar and more homes in Los Angeles that are staying on the market for an infinite amount of time. Those homes have notoriously been slow movers. Unfortunately, now any home that does not qualify as a first time home buyer's target market is likely to remain in the listings much longer that its owner would like. Foreclosures have become the flavor of the day, and the realtors that are seeing the most action are the ones that specialize in these. Unfortunately, foreclosures are not limited to those that are in low end housing. It has hit nearly every level of housing to some extent.