As an Amazon Associate we earn from qualifying purchases.

New: Community Explorer. Discover Your Perfect Community Quickly Based on Lifestyle, Amenities, and Unit Type.  

Try It NOW

Comments from Mortgage Lender Sends Wall Street Skidding

Category: Retirement Real Estate

July 29 — Countrywide Financial advised yesterday that more mortgages from people with good credit were having trouble making payments, news which sent the financial markets into a tailspin. Countrywide is the largest mortgage lender in the country. Hardest hit markets were the some of the strongest and biggest ones – California, Florida, Arizona, and Nevada.

Up to now the bad news in mortgages has mostly had to do with so-called sub-prime mortgages, those underwritten to borrowers with lower quality credit. The news that more mainstream borrowers on prime second-liens (a line of credit or second mortgage backed by a primary mortgage) are defaulting hit the stock market hard, sending the S & P 500 index down 2 percent, or just more than 30 points.

On Wednesday the market recovered .4% as the news was digested. Meanwhile today the National Association of Realtors reported that sales of existing homes in June were off almost 4%, about double the expected decline.

Home Prices Dropping
One of Countrywide’s executives was quoted in the New York Times as saying that home prices were falling “almost like never before, with the exception of the Great Depression.” The research firm Case-Shiller estimates that home prices have fallen 2.1% as of the end of April in 20 large metropolitan areas it tracks. Industry experts point out that growing inventories of unsold homes are adding to the problem, keeping prices down and resulting in more homeowners having negative or very small equity.

Implications for Active adult and retirement communities
Obviously the retirement market is different than the sub-prime market. But a negative market is a negative market, even for segments that have been stronger. Our advice would be that if you are a seller and don’t have to be – take it off the market. If you are a buyer, start looking. The market is likely to recover in late 2008 or 2009.

Links: Glut of Homes Rises
Should Boomers Dive in Real Estate Market
Should you purchase your home in a retirement community at auction?
Baby Boomers Invading Singles Condos

Comments on "Comments from Mortgage Lender Sends Wall Street Skidding"

 

Your comment will be revised by the site if needed.

Recent Blog Articles

Blog Categories

Showcase Active Adult Communities

Skip to content