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Housing Bubbles and You
Are we in a housing bubble? To answer that question first we need to understand what a housing bubble actually is. A housing bubble is what happens when the there is a significant rise in the market that is mostly due to the expectation that the prices will continue to rise. The bubble will not burst until people start to doubt the reasoning behind the increase. Once the bubble is burst the market will take a sharp drop. You will find that financial markets are much more prone to market bubbles than the housing market. There is a good reason for this and that is the fact that housing markets have so many more costs involved. For example you have to deal with sales commissions and other carrying costs. But how do you really know if you are in a housing bubble? Is it possible to speculate on price increases when you are in the midst of new construction? Can you actually avoid transaction costs? Yes it is possible but there are a series of buys and sells and loans involved which is a lot of work for many people. It is far more risky for both the borrowers and the lenders when they are working in an area that is in a price bubble. Lenders need to be very careful because the market could collapse at any moment. The problem for the lenders is that by offering different loans to different areas that could be considered discrimination, what then? Isn't discrimination illegal? It could be in some places. Lenders have it tough because either way they stand to lose a lot and the competition is high everywhere. It can be difficult for mortgage brokers to get a fair shake when their rates are not competitive enough, but they can only do so much before they are taking to large of a risk. They need to find the right lenders to work with and that can be a challenge as well. AN investment loan is something that is getting more popular all of the time. Many people buy homes not to live in themselves but to rent out for profit. This type of investing can bring in a lot of money to the investor if they know what they are doing. This is an especially risky loan to give when in a housing bubble. That is why these mortgage brokers are so in need of good counterparts. Price appreciation is the key to all housing bubbles. If you want to make the most out of the money you have to spend on a house you will want to choose the option adjustable rate mortgage. This is a great choice for those who do not want to be paying too much in the beginning stages of their mortgage. As a housing bubble buyer you have the power to get much more house for your money. Since the prices are being driven up the more you spend the more it is going to be worth in a couple of years. This means that you stand to make much more money than if you bought smaller and an option ARM will only give you even more power to buy. Even though the balance on the loan may be getting larger at first this does not matter in the least when you are standing to make so much more money. The amount that you will make will more than make up for this factor. But remember as an investor that this might sound good, and it is god, but only as long as the housing bubble does not burst. Once it does you and the lender stand to lose a significant amount of money. Martin Lukac, California mortgage Lender (http://www.martinlukac.com), provides mortgage financing for purchase, refinance, bad credit, and more. Request a free quote or ask a question.
MORE RESOURCES: Rules that helped set real estate agent commissions are changing. Here's what you need to know The Associated Press Realtor Lawsuit Settlement Will Change the Housing Market Forever Business Insider The Realtors' Big Defeat The New York Times Why This Real-Estate Investor Favors Commercial Vs. Residential Business Insider Wall Street's Most Accurate Analysts Say Hold These 3 Real Estate Stocks With Over 4% Dividend Yields Markets Insider Who are real estate lobbyists talking to in New York? City & State New York Public records: Coshocton County, Ohio, real estate transfers Coshocton Tribune Brockton-area real estate sales for Dec. 26 to Dec. 29, 2023. Enterprise News The End of the Super Broker Era in Commercial Real Estate Commercial Observer Real estate shake-up: Possible commission changes ahead 11Alive.com WXIA Landmark Settlement Breaks Up the Real Estate Cartel The American Prospect Real Estate Commissions Are About to Get Much Cheaper. Here's How Zillow, Redfin, and Opendoor Could Be Affected. The Motley Fool On Real Estate: The confusing and contradictory state of post-pandemic retail Crain's New York Business Local real estate agents abuzz over proposed commission changes Central Penn Business Journal Miami Beach real estate investor under investigation for firing shotgun from waterfront home WSVN 7News | Miami News, Weather, Sports | Fort Lauderdale REAL ESTATE | New signage for Auto Safety Center on S. Main Street, West Bend, Wi washingtoncountyinsider.com A luxury agent on how the NAR settlement will change his business The Washington Post WORLD PROPERTY VENTURES: The 'DARPA of Real Estate' Announces New Digital Initiatives The World Property Journal Knoxville School Board to Hold Several Public Hearings Regarding Real Estate Parcels KNIA KRLS Radio Cities Face Cutbacks as Commercial Real Estate Prices Tumble The New York Times Realtor group will pay $418M to settle commission lawsuits The Associated Press Settlement will affect Iowa homebuyers KCCI Des Moines How new real estate rules may impact home prices in Connecticut Eyewitness News 3 Israeli real estate event: Legal complaints escalate NorthJersey.com China's Real-Estate Market Just Set a Record—but Not a Good One The Wall Street Journal Is the Era of the Celebrity Real Estate Agent Over? Industry Reacts to Settlement That Could Slash Commissions Hollywood Reporter What the death of the 6% real estate commission means in D-FW The Dallas Morning News What Seattle-area homebuyers should expect after national settlement The Seattle Times Hocking County real estate transfers | News | logandaily.com Logan Daily News National Association of Realtors Agrees to Slash Commissions to Settle Lawsuits - The New York Times Realtors Reckon With a Seismic Shift to How They Get Paid The Wall Street Journal Realtors settlement brings confusion, relief to Southern California’s real estate industry OCRegister Realtors Reach Settlement That Will Change How Americans Buy and Sell Homes The Wall Street Journal California, United States Luxury Real Estate Home California Listings Making Sense of New York's Confusing Luxury Home Market The Wall Street Journal How KC-area brokerages rank by CRE category: industrial, office, multifamily - Kansas City Business Journal The Business Journals A commission settlement may affect housing market 9News.com KUSA End of 6% real estate commissions could mean lower home prices The Atlanta Journal Constitution National Association of Realtors to cut commissions to settle lawsuits. Here's the financial impact. CBS News A Look Into the Future of Home Buyers' Agent Commissions The Wall Street Journal Once America's Hottest Housing Market, Austin Is Running in Reverse The Wall Street Journal Chicago Voters Face Choice on Tax to Fund Homeless Programs The New York Times Yoon to scrap 'reckless' plan to raise declared real estate value The Korea JoongAng Daily Wilmington realtor weighs in on proposed changes to real estate industry following major settlement WECT Blackstone, World's Top Alternative Asset Manager, Eyes Record Highs Amid Real Estate Bottom Investor's Business Daily Bridgemarq Real Estate Services (TSE:BRE) Share Price Passes Above Two Hundred Day Moving Average of $12.93 Defense World 4 Ways a Settlement Could Change the Housing Industry The New York Times Revolutionizing Real Estate Lead Generation: Stephen Zochowski's Groundbreaking New Book 24-7 Press Release Colony Ridge violated deceptive trade practices, Texas says The Texas Tribune Real Estate Stocks Drop As NAR Agrees to $418 Million Settlement Markets Insider What will the Realtors settlement mean for Arizona homebuyers? The Arizona Republic |
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