Archive for Fort Lauderdale Housing Market
Lower Your Interest Rate Not Your Offer Price
Posted by: | CommentsDoes A Lower Offer Price Or Lower Interest Rate Have More Value?
When buying a home, too often the focus of getting a great deal is placed solely on negotiating the lowest price on the property. Does the lowest price always mean the best deal? Common sense tells us that the less we pay for something, the better the deal we received. Most times, if a home buyer is paying cash for a property, the lowest price may be the best deal. However, if one is buying a home with a Fort Lauderdale mortgage, there may be more value to a lower interest rate than a lower offer price.
It’s very common for a home buyer to negotiate their transaction with the seller paying all or part of their closing costs. This Ft Lauderdale mortgage strategy is most often used to minimize the amount of cash the home buyer has to bring to closing. As a Fort Lauderdale mortgage broker and CMPS professional, I understand the value of seller paid concessions. Most FHA mortgage transactions rely on seller paid closing costs to make buying a home possible. Conventional mortgage transactions are less reliant on seller contributions to make the deal work.
When considering a Fort Lauderdale mortgage in conjunction with buying a home, you may find more value in using seller paid concessions to obtain a lower interest rate rather than negotiating the lowest sales price. Let me explain and illustrate how this Ft Lauderdale mortgage strategy can help a home buyer get the best deal.
John and Nancy are buying a home priced at $350,000 with a Ft Lauderdale mortgage. They want to get a great deal, so they are considering reducing their offer price by 4% or $14,000. This would make their offer $336,000 and with a 20% down payment they would have a Fort Lauderdale mortgage amount of $$268,800. A 30 year fixed rate Florida home loan at 4.75% would give them a monthly payment of $1402.19. Over the term of the loan, John and Nancy will have paid $235,988 in interest expense and $504,788 in monthly payments.
Now let’s look at buying a home at the asking price of $350,000 and receiving a 4% seller paid contribution that will be used to obtain a lower interest rate. Using the same 20% down payment criteria, John & Nancy would now have a Ft Lauderdale mortgage amount of $280,000. As a Fort Lauderdale mortgage broker, I would use the 4% seller contribution to get the home buyer a lower interest rate. They could obtain a 30 year fixed rate Florida home loan at 4.0% with a monthly payment of $1336.76. over the life of the loan John & Nancy will pay $201,235 in interest expense and $481,235 in monthly payments.
This Fort Lauderdale mortgage strategy resulted in saving John and Nancy $34,753 by offering a higher price and using a seller paid contribution to obtain a lower interest rate. Now, here’s the frosting on the cake. The 4% contribution paid by the seller is recognized by the IRS as prepaid interest and becomes a tax deduction for a home buyer. That means the $14,000 seller paid contribution becomes a tax deduction for John and Nancy. Assuming they are in a 28% tax bracket, that would provide John & Nancy another $4,000 tax deduction bringing their total savings to almost $39,000. Imagine, paying more for the home and saving money just by knowing how to structure a Fort Lauderdale to benefit the home buyer. Contact your professional Fort Lauderdale mortgage broker and CMPS professional, Harvey Collier today to help you structure your next Florida home loan.
Harvey Collier - First Trust Mortgage – 954-629-6151
Price Reduction vs Seller Paid Concession
Posted by: | CommentsWhich Has More Value, A Price Reduction Or Seller Paid Concession?
When looking to purchase a home with a Fort Lauderdale mortgage, is it more advantageous to the buyer to seek a price reduction in the home or to pay more and receive a seller paid concession? As a Fort Lauderdale mortgage broker, I’m always surprised this question is not only asked more frequently, but hardly considered at all by most Fort Lauderdale Realtors or their buyers.
Most transactions that include seller paid incentives are typically used to pay buyer’s closing costs. The most effective use of seller paid concessions is actually using the incentives to lower the buyer’s interest rate. A Fort Lauderdale mortgage structured with the seller paying points to lower the buyer’s interest rate will greatly out-perform a similar price reduction on the property.
This point is best illustrated by examining an actual case study I recently evaluated for a potential prospect. It involved the purchase of a Fort Lauderdale foreclosure financed with a Conventional Fort Lauderdale mortgage. The asking price of the property was $400,000. The buyer wanted to evaluate whether he would be better served to offer the asking price of $400,000 and request a 3% seller concession, or lower his offer to $388,000 with no concession?
The table below will illustrate the comparison of lowering the offer price by 3% or $12,000 vs. using the $12,000 to buy down the interest rate on a 30 year fixed rate Fort Lauderdale mortgage. Column 1 shows paying asking price with 3% incentive and making required monthly payment ($1574.21). Column 2 shows paying asking price with 3% incentive and prepaying the $68.45 savings every month (same payment as price reduction). Column 3 shows reducing the offer price by 3% ($12,000) and receiving no seller incentive. The results are as follows:
List Price–no prepayment List Price–with prepayment Price Reduction
Sales price $400,000 $400,000 $388,000
Loan Amount $320,000 $320,000 $310,400
Interest Rate 4.25% 4.25% 4.875%
Payment $1574.21 $1574.21 $1642.66
Payment Savings $68.45 $68.45 $0
Total Payments $566,713 $566,713 $591,359
Total Interest $246,713 $224,209 $280,959
Interest Savings $34,246 $56,750 $0
The results of this case study show that it is clearly more advantageous for a buyer using a Fort Lauderdale mortgage to seek a seller concession vs. a price reduction when purchasing a home. Paying $12,000 more for the home actually saved the buyer $34,246 in interest expense and $24,646 in total monthly payments using the normal amortization. If the buyer re-invested the $68.45 monthly payment savings back into the mortgage, the interest savings increases to $56,750.
If that’s not convincing enough, then here’s the frosting on the cake. A Fort Lauderdale mortgage using a seller paid concession to buy down the interest rate is considered by the IRS as prepaid interest. As such, the buyer is eligible to deduct the points paid by the seller on their tax return. Therefore, if the buyer is in a 28% tax rate, they have created an additional $3,360 tax break for themselves on top of the interest and payment savings.
Turbo-charge your Fort Lauderdale mortgage with a seller paid concession instead of seeking a price reduction. As a professional Fort Lauderdale mortgage broker, I can show you how this strategy can save you money as a buyer or help you sell more homes as a Fort Lauderdale Realtor.
Call Harvey Collier at First Trust Mortgage today to see how much you can save by using this buyer strategy.
Watch Out – Lapse Of Flood Insurance May Delay Your Closing
Posted by: | CommentsNational Flood Insurance Program Lapses
Congress has let the National Flood Insurance Program lapse for the third time this year. The program expiration occurred on June 1st, the first day of “hurricane season” for the Gulf of Mexico. Congress has attempted to grant a short-term extension of the National Flood Insurance Program, but efforts have been delayed, as the extension is attached to other legislation in the House and Senate. All the recent National Flood Insurance Program extensions have been short-term, as Congress hopes to overhaul the program, which will take some time.
Home buyers that are getting a mortgage to purchase their home are required by lenders to have flood insurance if their property is located in a Federal Flood Zone. Homeowners that already have flood insurance won’t be impacted by the lapse. Nor will buyers of condominiums where the Condo Association has a master flood policy. However, homeowners seeking to amend their current policy or purchase a new one will have to wait until Congress extends the program. More urgently, those home buyers purchasing a home located in a Federal Flood Zone and obtaining a mortgage won’t be able to close on their sale until Congress grants another short-term extension.
The NAR has been contacting members and asking them to contact their Congressional Representatives to extend the National Flood Insurance Program sooner than later. It is feared that if Congress doesn’t act by the end of the month, their could be significant repercussions on other areas of the housing recovery. A word to the wise, as soon as you have an executed sales contract, check to see if the property is located in a Federal Flood Zone. Hopefully the problem will be resolved soon, but until then it’s important to stay on top of this important issue.
Fannie Mae HomePath Loans Rock!
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Looking For A Great Deal On A Florida Foreclosure?
One of the best choices you could make to purchase and finance a Florida foreclosure is the Fannie Mae HomePath program. Fannie Mae markets their own Florida foreclosures using the HomePath brand name. You can access these listings through your local Real Estate Agent, or directly at the Fannie Mae HomePath website located at: www.HomePath.com .
Fannie Mae HomePath properties are also eligible for special HomePath Financing that can add even more value to your Florida foreclosure purchase. HomePath financing has several advantages over a traditional Florida home loan:
- Buyers using special HomePath financing can purchase a home with as little as 3% down.
- Unlike traditional Fannie Mae Conventional financing or FHA financing, a low down payment HomePath mortgage doesn’t require “mortgage insurance”.
- Fannie Mae HomePath Financing can be used to purchase an investment property with only 15% down.
- A Fannie Mae HomePath property and mortgage doesn’t require a property appraisal.
- HomePath Financing allows for a 6% seller concession, while Fannie Mae Conventional financing only allows 3% on loans with less than 20% down. Currently, FHA financing allows for 6%, but that is likely to change to 3% in the near future.
If you want to repair, upgrade, or remodel your HomePath foreclosure, certain properties have been designated to be eligible for a Fannie Mae HomePath Renovation Loan. This special Florida home loan allows a buyer to purchase a HomePath foreclosure and finance the renovation into their mortgage. Properties that are eligible for HomePath Renovation Financing feature the “Renovation Logo” above on Fannie Mae’s website.
The Fannie Mae HomePath program is a perfect one/two punch to get a terrific deal on a Florida foreclosure and finance it with the perfect Florida home loan.
Harvey Collier and First Trust Mortgage are approved Fannie Mae HomePath lenders. Contact Harvey Collier today with all your HomePath inquiries.
Impact Of A Florida Foreclosure On Your Credit Score
Posted by: | CommentsHow will a Florida Foreclosure or Short-sale affect your credit report?
Home owners contemplating a short-sale or Florida foreclosure frequently ask how the decision might impact their credit score and overall credit report. For those faced with no other option, the decision to give up your home probably means you’re not making your auto and credit card payments either. Those in this position will take a severe hit to their credit score and ability to obtain credit in the future. It will be a rebuilding process that will take several years and careful planning.
A second group of home owners are faced with an investment property they speculated on and are now upside down on their mortgage with no prospect of getting back to even any time soon. Yet, another group are home owners that bought a primary residence during the peak of the market and are now upside down with little prospect of recovery in the foreseeable future. Many of these home owners now find themselves faced by what is being referred to as a “business decision”. The question here is, “What is the cost of continuing to make the payments until the housing market recovers versus walking away from the property?” Most home owners can make an educated guess how long it will take for the market to recover and do the math to calculate the financial loss. But, how will the credit report and credit score consequences affect their future going forward?
Anyone contemplating a short-sale or Florida foreclosure, whether it’s an investment property or your primary residence needs to know:
- A Florida foreclosure or short-sale will remain on your credit report for seven years.
- The impact of a Florida foreclosure or short-sale will lessen over time.
- A Florida foreclosure or short-sale is a single negative item on your credit report.
- Limiting the damage to your credit report to only the Florida foreclosure or short-sale will lessen the damage to your credit score.
- Limiting a Florida foreclosure or short-sale to a single negative item can allow you to regain your credit score in as little as two years.
Another common question many home owners ask is “Does it make a difference on your credit report or to your credit score if you do an alternative to foreclosure, such as, a short-sale or deed-in-lieu of foreclosure?” The credit bureaus evaluate all of these options as “not paid as agreed accounts” and consider them the same for your credit score. When a home owner is considering bankruptcy as an alternative to foreclosure, that will have an even greater impact on your credit score.
So, how much of an impact will a Florida foreclosure or short-sale have on your credit score?
- Those with a 780 or higher credit score can expect a Florida foreclosure or short-sale to lower their credit score about 150 points.
- Those with a 680 credit score can expect their credit score to drop by 100 points.
- Those with a 780 credit score that add a bankruptcy to the Florida foreclosure or short-sale could lower their credit score by 230 points.
- Those with a 680 credit score that add a bankruptcy to the Florida foreclosure or short-sale may lower their credit score by 150 points.
The key to minimizing the damage to your credit report and credit score is to make sure that your “business decision” is held to a single negative item. However, be aware that you will be unable to qualify for another mortgage for a minimum of 2-3 years after the Florida foreclosure or short-sale action.
Florida Foreclosures + FHA 203k Loan = Marriage Made In Heaven
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An FHA 203k Loan Can Make Florida Foreclosures Your Dream Home
Getting a great deal on a Florida foreclosures isn’t always as easy as you may think. The best values on Florida foreclosures are usually the Florida homes that are in less than perfect condition to really distressed. Many Florida foreclosures haven’t had any maintenance for a couple of years and need some work to major renovation to become habitable again.
It’s not unusual for Florida foreclosures to need a new roof, plumbing or electrical repairs, structural repair or even kitchen and bathroom replacement. Frequently, disgruntled home owners damage the home in anger on the way out-the-door. Others rip out kitchen cabinets, bathroom fixtures, A/C units, water heaters and anything else they can take with them to reuse or sell. Florida foreclosures in this shape, require all cash buyers, as no lender will make a loan on a property that poses a health or safety risk.
Now, you can level the playing field with an FHA 203k Renovation Loan. This Florida home loan is a great solution for those buying Florida foreclosures and needing financing to renovate their Florida homes. An FHA 203k Renovation loan allows a buyer to purchase Florida foreclosures and get a Florida home loan that will finance the necessary repairs, renovations, or even add-on to their home.
Home Buyers looking for a great deal on Florida foreclosures, should consider an FHA 203k Renovation loan. Imagine, finding that perfect “diamond in the rough”, and turning it into a brilliant gem. An FHA 203k loan and a little imagination can make Florida foreclosures a terrific value and choice with only a 3.5% down payment required. You might just find Florida foreclosures + an FHA 203k loan = a marriage made in heaven.
Contact Fort Lauderdale mortgage broker, Harvey Collier, for all your FHA 203k Renovation loan needs.
Purchase A Recent Property Flip With A Florida Home Loan
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Fort Lauderdale Mortgage Broker Offers Florida Home Loan For Recent Property Flip
Are you an Agent or Buyer that have been faced with the challenge of trying to purchase a recently “flipped” property? One of the most perplexing problems for real estate investors that are buying and selling properties has been bank restrictions on these transactions that involve a Florida home loan. Industry guidelines have required a 90 day waiting period before a buyer can enter into a contract to purchase and be eligible for a Florida home loan.
Real estate investors want to buy and sell as quickly as possible. Most times they are purchasing a property for cash or with private funds, do a quick rehab and already have a buyer lined up to purchase. The 90 day wait period to even enter into a contract, has precluded many buyers needing a Florida home loan. The result has been many cash buyers getting a great deal, while those needing a Florida home loan have missed these opportunities.
Earlier this year, FHA passed a temporary waiver of its 90 day “flip rule” and said buyers would be eligible for FHA Mortgage Insurance on transactions without the wait period providing it met certain criteria. The waiver allowed the investor to resell the property with up to a 20% profit (based on acquisition cost plus documented improvements) with one appraisal and if over 20% required a second appraisal. The ultimate decision is up to the underwriter and lender making the Florida home loan.
This announcement was enthusiastically received by Real Estate Agents, Property Flippers and Buyers. However, like most other lending guidelines today, banks take FHA, or Fannie Mae rules and impose their own overlays on top of them to mitigate their own risk in the transaction. This has resulted in many lenders being fearful of originating a Florida home loan that is over the 20% profit threshold, even with a second appraisal. Banks are extremely risk adverse these days and very few have any appetite to potentially buy back a loan. Unfortunately, lenders are all staying on the safe side of risk and most are still unwilling to allow a transaction that is selling for more than a 20% profit to close without waiting 90 days.
This certainly wasn’t the intent of the waiver period, but it is the reality. The waiver was created to help the housing market absorb the glut of distressed housing and stabilize sooner. Most people don’t realize that HUD doesn’t actually provide the Florida home loan, it only provides the lender or bank originating the loan the FHA mortgage insurance protection. Otherwise, banks wouldn’t make a loan with less than 20% down.
Fort Lauderdale mortgage broker, Harvey Collier, now offers a Florida home loan to purchase a “Flip Home” without a waiting period. As long as the property value is supported by 2 independent appraisals, the lender has no profit restriction on the transaction. If you are a buyer or Agent looking to take advantage of a great deal on a recently flipped property, or an investor looking to do a quick flip, First Trust Mortgage has a Florida home loan for you.
Are You A Florida Real Estate Speculator Or Investor?
Posted by: | CommentsGreat fortunes can be made and lost in Florida real estate. Speculators are generally prepared to take on more risk and usual have a short-term strategy. Investors tend to have a long-term approach, which tends to minimize the risk. A Certified Mortgage Planning Specialist is committed, qualified and equipped to help you implement the seven keys to profitable real estate investment:
Key 1 – Determine Level of Liquidity - liquidity is the ability to quickly convert an investment into cash, without losing any of the principal that you’ve invested. For example, a savings account is highly liquid. In contrast, real estate is considered to have low liquidity because of the time it takes to sell the property and the unpredictability of the market value at the time you are ready to sell. The greatest real estate fortunes have been lost by those who overextended themselves and didn’t have enough liquidity to weather the ups and downs in the Florida real estate market. A CMPS professional can help you implement strategies to maintain high levels of liquidity to be able to weather the storms in the marketplace and take advantage of profitable investment opportunities.
Key 2 - Determine Level of Marketability - marketability is the ability to convert an investment into cash quickly, at any price. For example, stocks can be sold anytime on an organized stock exchange at the prevailing market value. However, the price at which the stock is sold can produce a loss for the investor who is selling the stock. With real estate, not only will you need to deal with market conditions, there will be real costs to consider whenever you sell a property, such as brokerage fees, marketing fees and title insurance. A CMPS professional can help you invest with a business plan and avoid the marketability risks associated with real estate speculation.
Key 3 - Determine the Impact of Leverage - leverage is the use of borrowed funds to finance a portion of the purchase price of an investment. The ratio of borrowed funds to the total purchase price is known as the loan-to-value (or LTV) ratio. A high LTV would result in high leverage, while a low LTV would result in low leverage. Florida real estate investments can be more leveraged than most other types of investments. Sometimes, mortgage debt results in ‘negative leverage’. In this case, you should avoid mortgage debt or sell the investment. Other times, mortgage debt results in ‘positive leverage’ and can enhance your rate of return on investment. A CMPS professional can help you avoid the trap of negative leverage while maximizing the benefits of positive leverage.
Key 4 - Evaluate the Investment Management Issues – there are really two levels of monitoring and managing a real estate investment:
- Asset Management - this is where you monitor the financial performance of the investment and make changes as needed. With stocks and bonds, you consult with an investment advisor, and/or a CPA to determine when to buy and sell investments. With Florida real estate investments, A Certified Mortgage Planning Specialist is qualified to serve as Florida real estate investment advisor and give you solid advice in this area.
2. Property Management - involves the overall day-to-day operation of the property and the physical maintenance of the building or buildings. Property management can include rent collection, paying the taxes, insurance and utilities, the exterior maintenance such as landscaping, snow removal and roof issues, as well as interior maintenance such as plumbing, painting, flooring, walls, kitchens, etc. Property management can become a huge trap for you if you don’t give it the proper evaluation prior to purchasing an investment. Obviously, unless you want to fix leaky toilets and gets calls from tenants at all hours of the night, you should seriously consider engaging in a professional relationship with a management company. Remember, time is money. If you want to make money in Florida real estate, don’t waste or lose your time, as you are in effect losing money.
Key 5 - Consider the Tax Impact of Your Investment Decisions: This includes such issues as: Classifications of passive, active and portfolio income and losses, Capital gains taxes, Income taxes, Tax Credits, Tax deductions and Tax Deferments. A CMPS professional can help you determine your before and after-tax rate of return on real estate investments. A CMPS professional will also work with your CPA in determining the best tax strategies for your situation.
Key 6 - Evaluate and Reduce Investment Risk - risk is the possibility of losing either the principal invested and/or the potential income from the investment. A CMPS professional can help you reduce investment risk in several ways:
- Risk Analysis – This is the process of evaluating alternative investments based on their level of risk. Risk analysis can be done using industry accepted rates of return and allowances for risk, or on an individual basis. Each investor has a different tolerance for risk, depending on their tax status, capacity for leverage and personal financial situation. For example, if you can earn 15% per year on a investment with a tenant who signs a five year lease, versus 20% per year on an investment with a tenant who signs a two year lease, is it worth the extra risk of not having a tenant after two years?
- Shifting risk – Work with a professional Realtor to help you structure your leases and rent agreements to shift the exposure of increasing costs to the tenants. This can include shifting the risk of rising interest rates, operating expenses or tax increases.
- Due diligence prior to purchasing an investment property – This is the process of examining a property and related documents i.e., appraisals, inspections, environmental surveys, title work, rent rolls, etc. to reduce risk. Your professional Realtor can help you apply a consistent standard of inspection and investigation. This will help you decide if the property meets your investment objectives or whether you should move on to the next deal.
Key 7 - Investing with the right entity – A CMPS professional is qualified to work with your real estate attorney to help you structure different ‘entities’ such as LLCs, Partnerships and Corporations to limit losses to your initial capitalcontribution into the investment.
Always remember the golden rule of investing … “ Diversification “.
Investing in multiple investment properties with varying risk levels reduces the chance that all the investments will be affected by the same turn of events. By keeping all your Florida real estate equity in your primary residence, you are not diversifying your real estate portfolio. On the other hand, if you spread your Florida real estate equity and investment dollars over multiple properties, you would be hedging your Florida real estate risk and diversifying your portfolio. On the same token, you need to be careful not to spread yourself too thin and not to invest without a business plan. If you end up with 10 mortgage payments on 10 vacant properties with no tenants, you would most likely end up in a very precarious financial situation. A Certified Mortgage Planning Specialist can help you diversify your investment portfolio to include Florida real estate while also diversifying your Florida real estate investment portfolio itself.
What Happens to Florida Home Loan Rates From Here?
Posted by: | CommentsWhere Are Florida Home Loan Rates Headed, Up Or Down?
The most recent economic data would suggest that Florida home loan rates are poised to move up from their current lows. Existing home sales in April showed a 7.6% gain in April. Single family home sales rose 7.4%, while condominium sales jumped 9.1% for the month. Regionally, home sales in the South were up 8.6% from March and 23% higher on a year-to-year basis.
Housing analysts have been predicting Florida home loan rates to gradually rise to 6% by year end, as the economy begins to recover and government support for low interest rates wane. The recent release of Consumer Confidence numbers far exceeded market expectations. This was the highest reading in over two years and indicates that consumers are much more optimistic about their own financial situations than many had thought. This is bad news for the bond market and mortgage rates because it means that consumers are more willing to spend, which causes inflation worries and high Florida home loan rates.
Now that Tax Credits for home buyers are gone and new banking and financial regulation is on the horizon, I anticipate Florida home loan rates to stay low for an extended period. New tougher financial regulation will make loans to consumers more expensive due to costs that will be imposed on the banking industry. Again, this would suggest higher Florida home loan rates.
So, how is it possible that Florida home loan rates will remain low when the economy seems to be gaining some momentum, Consumer spending has increased and Consumer confidence is on the rise? These signs all point to higher Florida home loan rates.
Florida home loan demand will remain weak. Recent data from the Mortgage Bankers Association showed that demand for home loans fell to a 13 year low after the expiration of the Home Buyer Tax Credit. The current pool of First-time buyers and move-up buyers is very shallow. Most banks are reporting weaker demand for loans from both consumers and businesses.
Weak employment and an uncertain economic environment will keep Florida home loan demand low. The Federal Reserve won’t be raising interest rates any time soon and Florida home loan rates may be pressured even lower, until employment growth becomes a sustained trend.
Startling New Study Suggests Astonishing Home Buyer Changes
Posted by: | Comments“Household Reaction to the Financial Crisis”
The Mortgage Bankers Association recently commissioned a study to look into how Americans will be affected by the current economic crisis, as it relates to consumer attitudes about spending, saving, retirement and the economic recovery. The study was titled “Household Reaction to the Financial Crisis”. The sub-title appropriately read, “Scared or Scarred?”.
The research was completed by The Research Institute for Housing America. There findings stated, “While Americans and the economy are noted for their resilience, the current financial crisis and recession exceeded devastation created by all other post-World War II recessions. Savings rates have risen substantially and many Americans will continue to cut their spending sharply out of necessity, others out of fear of what the future holds. Since consumers account for two-thirds of GDP, we are facing the “paradox of thrift” as households try to rebuild their net worth. Reduced spending will likely delay and weaken the recovery, as consumer attitudes make startling changes.”
How will these attitude changes affect Home Buyers? The Fort Lauderdale real estate market along with many other areas of the country are unlikely to see a dramatic downturn of Fort Lauderdale foreclosures, loan delinquencies and bankruptcies. The unemployment situation and home prices are likely to remain depressed, while delinquent mortgages will continue to restrain lenders willingness and ability to provide credit.
The study was very sobering, as it predicted further cutbacks in consumer and business spending that would further under mind the recovery. One of the biggest take-aways from the study revealed that such strong headwinds to an economic recovery are likely to have lasting implications on the values and behavior of the current generation, much like the “Great Depression” had on its generation.
Another key point of the study revealed underemployment is much higher than the reported unemployment rate and the length of joblessness spells are getting longer. The report stated that people entering the labor force during recessions have lower lifetime incomes. Without a reasonably rapid recovery in employment, which is very doubtful at this point, there is a risk we will create a “lost generation” that may never catch up.
Fort Lauderdale realtors, Fort Lauderdale mortgage brokers and agents around the country will need to recognize and adapt to the “winds of change” this phenomenon will bring to the Fort Lauderdale FL real estate market. The severity and havoc caused by the recent financial crisis far exceeds what we experienced in past recessions. This has resulted in the disruption of millions of American lives.
We won’t fully know the full impact of these events yet, but it’s reasonable to expect that we will need to prepare for a world and local real estate market that will be irrevocably changed by this experience. For the reasons discussed in this study, Fort Lauderdale realtors and Fort Lauderdale mortgage brokers should expect hesitant Home Buyers, cautious businesses and conservative lenders in the years ahead.
Now is the time to recognize and adjust to these attitude changes. Home Buyers in the years ahead, will require more patience, understanding, education and convincing that home ownership is worth the risk and the investment.
