Hi, this is Isaac Toussie, a professional real estate developer of several years’ experience in the housing industry. Many of you probably already know me from my numerous articles on the worldwide web, where I share my personal and professional insights, wisdom gleaned from first-hand knowledge working in one of the toughest real estate markets anywhere. But in deference to any first-time readers, I am obliged to first offer the following disclaimer:
All the rest to follow will be my personal opinions, presented only for purposes of human interest and should never be misconstrued to be business advice of any kind, for which the reader is strongly urged to consult all the relevant licensed and otherwise properly qualified professionals.
Okay, so, with that out of the way, let’s get back to the subject of this installment, my take on the property market as it now exists in our country.
What strikes me most about the way things currently stand is the slowing rate of mortgage delinquencies. A recent industry survey found that this rate has actually declined a bit during the last three months of 2009, going against all expectations as the holiday season is traditionally the time when mortgage payments fall behind the most, for obvious reasons.
Even I am a little surprised. But could this be that much-awaited early sign of a recovery on the horizon?
Probably not, unfortunately. Many of us in the business, not to mention macro-economists and so forth, believe that the whole situation is still extremely serious, with still-record numbers of homeowners in abject financial distress. The real problem is that way too many have missed at least three payments, and these are precisely the folks who are, statistically speaking, the least redeemable by any of the many diverse mortgage relief programs on offer. It is, in other words, these very people who will be going into foreclosure next month or the one after that.
In recognition of these dire facts, the government has again stepped in on behalf of those with little or no equity in their homes. It recently announced an additional five and a half billion dollars in aid, with funds directed to those places where the majority of troubled loans were made. But because this merely extends an existing refinancing program that has reported little progress in over a year now, I have to be skeptical. Because for many delinquents, refinancing costs can eat away at any savings made on lower interest rates, making the whole effort not very worthwhile, particularly when the borrower also has reason to be worried about being laid off!