As we work with our buyers, sellers and prospects each day it’s important to glance up occasionally to take a reading of the "Tea Leaves". There is no crystal ball and we never have all the leaves, but there are usually enough market indicators present to provide good guidance. After all, our job is to provide our clients with accurate market information and an idea of what we could expect to see. The attached article from the Wall Street Journal caught my eyes yesterday and I want to encourage you to share it with all of your current and perspective sellers.
The article, "Loan Resets to Bite Consumers", focuses on the last large wave of Home Equity Line of Credit (Helocs) loans that are coming due or resetting within the next five years. As these loans become due, or reset at higher rates, many homeowners could be forced back into difficult situations and face foreclosure. A return to more foreclosure and short sale inventory will result in a softer market with lower sales prices. Here are some facts;
- In 2014, nearly 820,000 borrowers for a total of 23
billion dollars are facing their Helocs coming due and or resetting.
- For the next 3 years (2015-2017) an average of 50
billion in Helocs will come due each year.
- These figures have banks from Wells Fargo to JP
Morgan Chase more than concerned.
- Any prudent seller should consider getting ahead of
the market and sell now while the market is up.
- Any re-entry into a market weighted down by foreclosures
will affect all price points (entry level to upper end).
- If your sellers have been holding out on their right
price reduction, they should read this and consider the facts and their
current opportunity.
Good luck!
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