REI Wealth Magazine, Issue #58 - Amy Mahjoory | Page 59

" Most buyers usually need a mortgage to purchase a property ."
" Most buyers usually need a mortgage to purchase a property ."
2 . The CARES Act and foreclosure and tenant eviction moratorium : The CARES ( Coronavirus Aid , Relief , and Economic Security ) Act was passed on March 27 , 2020 by Congress as an attempt to minimize the economic hardship for homeowners and tenants nationwide . These moratoriums or legal postponements included within CARES prevented lenders from foreclosing on delinquent borrowers and stopped landlords from evicting tenants for missed rent payments .
In addition , the CDC ( Center for Disease Control ) also issued their own guidelines which prevented landlords from evicting tenants or landlords would face both significant civil fines and criminal prosecution . As a result , the foreclosure inventory dried up as well because there were so few foreclosure auction sales or tenant evictions which would ’ ve allowed investors to sell their properties to new buyers and the overall supply of distressed homes for sale plummeted .
3 . Declining home construction numbers : Freddie Mac , one of the largest national secondary market investors along with Fannie Mae , had claimed last year that there was a new home supply shortage of 2.5 million units as compared with the estimated buyer demand . Yet , the US hasn ’ t surpassed more than 1 million units , or 40 % of this 2.5 million unit number , since 2007 when 1.046 million new single­family home units were built .
During the depths of the Credit Crisis meltdown , new housing units declined to 430,600 in 2011 . The Mortgage Bankers Association ( MBA ) did forecast that 2021 might finally break 1 million units again nationwide by reaching a projected 1.134 million unit number .
California ’ s new housing start numbers , however , are not as positive as the rest of the nation . Back during the peak of the previous housing market boom in 2005 , there were 150,000 new single­family home units built . In 2020 , there were only 59,000 new single­family homes developed for a state with a population trending towards 40 million residents .
Some key factors why there are so few new homes being built in California are related to rising and unaffordable prices for land , lumber , steel , appliances , building permits , and environmentalimpact or “ sustainable living ” fees . If a home builder can ’ t make a profit , they aren ’ t very likely to take a risk to develop a new housing community .
Multiple Bids and Quick Sales
According to the May 2021 Zillow Market Report , the average time that a listing took to sell , or days on market ( DOM ), was just six days in spite of home prices reaching all­time record highs in most U . S . regions . The National Association of Realtors defines days on market ( DOM ) as the number of days the property is listed for sale on the local multiple listing service ( MLS ) up until the day that the buyer and seller have mutually agreed to the terms signed in the sales contract .
Because it ’ s very likely that a listed home for sale will probably have multiple offers , sellers can pick and choose between the best offers that may include all cash offers , 7 to 14 day closings , waiver of all third­party reports such as appraisals and home inspections , and even the option for the seller to remain in the home for another 30 to 60 days rent­free so that the seller has enough time to find a new place .
Most buyers usually need a mortgage to purchase a property . In today ’ s hot housing market world , buyers and their advising buyers ' agents don ’ t have much time to get pre­approved from their local bank or mortgage broker . Some lenders may need a few days to a few weeks to formally pre­approve a borrower , depending upon how complete the original loan application package is at time of the loan submission .
Fewer sellers in multiple bid situations will even consider accepting a purchase offer from a buyer who is not formally qualified before the buyer writes up the offer . This is why it ’ s so important to get pre­approved first before going out with a knowledgeable real estate licensee who understands the local housing trends and searching for properties . If so , you ’ re much more likely to be successful as a buyer , seller , tenant , landlord , or advising real estate licensee .
MEET RICK TOBIN
Rick Tobin has a diversified background in both the real estate and securities fields for the past 30 + years . He has held seven ( 7 ) different real estate and securities brokerage licenses to date , and is a graduate of the University of Southern California . Rick has an extensive background in the financing of residential and commercial properties around the U . S with debt , equity , and mezzanine money . His funding sources have included banks , life insurance companies , REITs ( Real Estate Investment Trusts ), equity funds , and foreign money sources . You can visit Rick Tobin at RealLoans . com for more details .
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