Market Up-Dates & Opinions – Jim McNees FHA and VA Mortgage Specialist

Based on all the media information, Wall Street predictions and expert opinions, here’s my opinion of what 2012 holds for real estate and the mortgage industry.  These are local Hampton Roads market reflections and based on my opinions and not scientific research or evidence.  Some comments about the general economy are included.

• The industry is coming out of the trough, it may be very slow however.
• 2011 was a growth year from 2010 for most in the industry.
• Inventory is shrinking and moving in the right direction.
• Interest rates will stay at or near historical lows for at least the first half of 2012.
• VA buyers can purchase a home with nothing down and have a mortgage payment less than the prevailing rents.  No reason for VA qualified borrowers not to buy.  Very similar for FHA borrowers as well.
• Mortgage payments are becoming incredibly low based on depressed values and really low interest rates.  The affordability index is strong.
• If you have a good job, reasonable credit scores and some money saved up; you can buy a house.  It’s not much harder than before, just more paperwork and compliance headaches.
• Don’t apply for a mortgage if you are not up to date with your income taxes.  Get your taxes reconciled and filed before you think about a mortgage.  Extensions are OK, but we would rather see current taxes.
• There are incredible deals for investment/rental properties.
• Homepath.com is a great way to buy a house.
• If you are resource limited and not an experienced homebuyer, don’t buy a house that needs a lot of work.  Spend more and buy a completed and finished product.
• Lower unemployment rates appear to be seasonal.  Fed Ex, Home Depot and other retailers are hiring for the holidays.
• Well paying jobs that provide benefits are still scarce.
• Mortgage companies are hiring like crazy.
• Construction to permanent loans to builders are hard to get, but FHA will do re-hab loans and 203k loans.
• The three major real estate trends moving forward are: 1. Tear downs and build up. 2. Energy efficiency and green homes. 3.  Multi generational housing.
• Nobody at any level talks about Gen Y and the potential impact on our economy.  Gen Y is approximately the size of the baby boomer generation.  As soon as Gen Y is fully employed to normal levels, the economy will revive.
• Health care is outrageously expensive and unaffordable for most.  The industry needs competition.
• Oil exploration and development will immediately fix our economy and create many,many jobs.  The technology to drill and refine cleanly in an environmentally correct manner exist, but those technologies need to be enforced.

Last comment – The Mortgage Bankers Association is predicting purchase units increasing nationwide from 409 units in 2012 to 763 units in 2013.  (in thousands)  That’s approximately 180% growth year to year.  Somethings brewing big for 2013 for the real estate purchase market!!