Wednesday, July 20, 2011

The Housing Market - Changing The Job Description

The real estate and mortgage industry have changed dynamically over the course of the last few years, and will hopefully never return to where it was during the boom of the market that took place a few years ago. Corrupt lending practice, bloated government spending in the secondary market, and irresponsible use of equity is what helped our housing market drop at a rate only rivaled by the Great Depression. From appraising to loan origination, the way businesses in this industry work has been altered to allow for more safe and secure practice.

Personally, I believe that the mortgage side of the real estate market has been affected the most. It is no secret that the indiscretions in the lending side of the market, as well as certain government entities allowing for almost limitless spending, played a big part in the housing bubble. Because of this, lending standards have been tightened, and there is much more due diligence being done on the part of the underwriter before a loan is approved. Also, systems within the lending offices themselves have been adjusted and updated. Believe it or not, many illegitimate foreclosures took place due to lack of communication between departments within lending companies. Much has been done to eliminate these problems, as well as dish out severe punishment for those not complying with federal lending regulations.

Appraisers are also having to alter the way they are conducting business. Many people blame appraisers for what happened in the housing market. Inflated appraised prices (often resulting in monetary kickbacks) on houses is what snowballed into an over priced real estate market. Appraisers are practicing more ethical appraisals, and are not over inflating the prices of homes.

Investors are switching their short term investment strategies into more long term ones. For instance, investors were making a killing by simply purchasing property, and then selling at an elevated price when the market went up. This allowed for more property flipping. Now, with the market maintaining low prices for the last two and a half years, investors are investing their money into long term rental properties that can be sold later on down the line. By purchasing a property and renting it, investors are capitalizing on a society that is calling for more rental properties, and well as setting themselves up in a good position when the market turns around. Real estate investors, however, are constantly altering their investment strategies to adhere to whatever the market is calling for at the time.

Anthony Flores is a real estate, mortgage, and investment consultant in Riverside, Ca. Houses for sale in Yorba Linda are remaining far above the rest in the housing market.  


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