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Whose Market Is It? |
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Subprime Primer |
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Stay Heart Healthy |
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I am pleased to present you with the latest issue of Life@Home. This electronic newsletter is designed to give you the real estate information that is important to you. I hope that you enjoy this issue of Life@Home. If I can be of any assistance, please do not hesitate to contact me. |
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Visit Century21.com and view more than 250,000 property listings! |
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Whose Market Is It?
 Real estate is a cyclical business. For months or even years conditions may favor the buyer. Then, over time, the pendulum will swing the other way and circumstances will favor the seller.
The market forces of supply and demand help determine whether it is a buyer’s or seller’s market. When the supply of homes is high, the sense of urgency for buyers lessens. Because there are more homes to choose from buyers can be more selective and may wield more power during the negotiations. In turn, sellers may need to lower their asking prices to attract consumer interest.
Conversely, in a seller’s market, inventory is lower. Buyers have fewer options and the sense of immediacy is heightened. As a result, the number of bids on any given listing may increase, asking prices might rise, and buying terms may become more stringent.
A second factor that influences the market is mortgage interest rates. High rates mean it costs buyers more money to borrow from a bank or lender. Higher rates can lessen consumer demand. On the other hand, when rates are lower and buyers feel they can get more for their money it can propel them into the real estate market.
If you are considering buying a home it is critical that you determine whether it is a buyer’s or seller’s market. Equally important is to remember that real estate is local. Different factors could make it a seller’s market in one city and a buyer’s in another. To help you determine which conditions prevail examine how long listings are staying on the market, compare that rate to six months ago, and look at whether homes are selling above or below asking price.
Your real estate agent should be an expert in your local marketplace. His or her insight will be key. Remember the market climate – buyer or seller - will ultimately influence your decision when to buy and at what price and terms.
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Subprime Primer
 In recent months, the national spotlight has been focused on the residential mortgage loan classified as “subprime.” In fact last month President Bush announced an initiative to assist homeowners affected by the “subprime crisis.” Just what is this product?
When consumers apply for a loan they are evaluated using many criteria, including credit history, savings, salary, etc. Borrowers with better credit scores and a better record of paying their bills on time are often given “prime” conditions. They receive lower interest rates because they are a less risky investment for the bank or lender.
Borrowers with lower credit ratings (less than 620 on a scale of 300 to 850), a history of late payments, bankruptcy, high debt, or other negative characteristics are classified in the “subprime” market. Subprime loans tend to have higher interest rates than traditional prime loans.
This type of lending gained popularity in the early part of this decade and helped spur homeownership rates. It is important to note that for many subprime borrowers it has been a successful arrangement. However, many others have been unable to meet the obligations of their mortgage and are now faced with losing their investment. Foreclosure rates are at an all-time high.
Given the far-reaching implications on the housing and financial markets, subprime lending is sure to remain on the national center stage for some time.
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Stay Heart Healthy
 Did you know coronary heart disease is the number one single killer of women over age 25? You can take a proactive approach to beating the statistics by eating right, exercising and reducing stress. It is also important to visit your doctor regularly. Visit goredforwomen.org for more tips and information. | |
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Copyright © 2005. CENTURY 21 Real Estate LLC. To unsubscribe, click here. |
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2006, 2005 Masters Award Serving Coldwater Lake, South & North Chain, Lake George and others.
Each Office is Independently Owned and Operated. © 2003 CENTURY 21 Real Estate Corporation. ® and SM trademarks and service marks of Century 21 Real Estate Corporation. Equal Housing Opportunity.
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