Ben and his staff have been busy looking at the housing market issues, and in the interest of continuing to talkabout the housing market, they wrote a nice paper entitled:
When I read it, I wasn’t happy.
Below is a 5 point “Readers Digest” version of the paper.Please note : Items
marked in all caps are solely my edits, and there is added emphasis in
Page 4 “HOUSING IS STILL A BIG PROBLEM”
Currently, about 12 million homeowners are underwater
on their mortgages (figure 3)–more than one out of five homes with a
mortgage. In states experiencing the largest overall house price declines–such
as Nevada, Arizona, and Florida–roughly half of all mortgage borrowers
are underwater on their loans.
Page 11 “THE SHADOW INVENTORY IS REAL. AND REAL BIG.”
Finally, the number of properties currently in the foreclosure process is more than four times larger than the number of properties in REO inventory
Page 14 “WE THINK BANKS WOULD MAKE GREAT LANDLORDS TOO”
Page 22 “WE KNOW THERE WILL BE LOTS OF LAWSUITS COMING. THE BANKS
HAVE HANDLED THIS EXTREMELY POOR SO FAR”
- I’m OK with a choppy market, financing challenges, and even the “shadow inventory”.
- What I am not OK with – is the banks that I have been buying properties from – now becoming landlords too.
- There is no motivation for these banks to sell properties, if they can rent them instead.
- I see no motivation for these banks to rent at market rates. They don’t sell houses at market rates, and I fear they will drive down market rents as well.
- Finally, I am fine with “competing” against other small investors, and the private sector. But the federal reserve system “contemplating issuing guidance” and essentially sponsoring banks to become landlords?…. It just doesn’t sit well with me.
These are certainly choppy times to be a real estate investor.
Now is the time to surround yourself with active seasoned
investors who can give you advice and guidance.
Join us at Washington REIA Network on Monday, as we discuss this
report and how it may affect income producing properties in the
Jack is the founder of MidAtlantic IRA, and many of you know, his
business has changed my life. Jack has been my secret weapon when
it comes to putting together complex deals, and using my Self Directed
IRA in real estate investment transactions. Jack is a master at
taking a complex situation, and explaining it “in plain English”.
You can see our latest video and hear more details about Jack
Kiley and the upcoming meeting at this link.
Register early and grab the January Only membership specials
online, and then skip the registration line on Jan. 16th!
You will also find the registration link at
And as always, let me know if I can help with your real estate
investing here in the DC area.
Washington REIA Network, President
Profitable Property, Founder
P.S. Mark your calendars for January 16th, and join us at the Womans Club of Bethesda for the first WREIA Meeting of 2012!