Marshall Malone, REALTOR® AT RealtySouth
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will forbearance a tsunami of foreclosures

1/18/2021

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At the onset of the economic disruptions caused by the COVID pandemic, the government quickly put into place forbearance plans to allow homeowners to remain in their homes without making their monthly mortgage payments. Today, almost three million households are actively in a forbearance plan. Though 29.4% of those in forbearance have continued to stay current on their payments, many have not.
Yanling Mayer, Principal Economist at CoreLogic, recently revealed:

“A distributional analysis of forborne loans’ payment status reveals that more than one third (39.1%) of all forborne loans are now 150+ days behind payment, while as many as 1-in-4 (25.5%) are 180+ days past due.”
These homeowners have been given permission to not make their payments, but the question now is: how many of them will be able to catch up after their forbearance program ends? There’s speculation that a forthcoming wave of foreclosures could be the result, and that could lead to another crash in home values like we saw a decade ago.

However, today’s situation is different than the 2006-2008 housing crisis as many homeowners have tremendous amounts of equity in their homes.

What are the experts saying?
Over the last 30 days, several industry experts have weighed in on this subject.

Michael Sklarz, President at Collateral Analytics:
“We may very well see a meaningful increase in the number of homes listed for sale as these borrowers choose to sell at what is arguably an intermediate top in the market and downsize to more affordable homes rather than face foreclosure.”

Odeta Kushi, Deputy Chief Economist at First American:
“The foreclosure process is based on two steps. First, the homeowner suffers an adverse economic shock…leading to the homeowner becoming delinquent on their mortgage. However, delinquency by itself is not enough to send a mortgage into foreclosure. With enough equity, a homeowner has the option of selling their home, or tapping into their equity through a refinance, to help weather the economic shock. It is a lack of sufficient equity, the second component of the dual trigger, that causes a serious delinquency to become a foreclosure.”

Don Layton, Senior Industry Fellow at the Joint Center for Housing Studies of Harvard University
:

“With a greater cushion of equity, troubled homeowners have dramatically improved options: a greater ability to access funding (e.g. home equity lines) to keep paying monthly expenses until family finances might recover, improved ability to qualify for and support a loan modification, and, if push comes to shove, the ability to sell the home and monetize their increased net worth while reducing monthly payment obligations. So, what should lenders and servicers expect: a large number of foreclosures or only a modest increase? I believe the latter.”

With today’s positive equity situation, many homeowners will be able to use a loan modification or refinance to stay in their homes. If not, some will go to foreclosure, but most will be able to sell and walk away with their equity.

Won’t the additional homes on the market impact prices?Distressed properties (foreclosures and short sales) sell at a significant discount. If homeowners sell instead of going into foreclosure, the impact on the housing market will be much less severe.

We must also realize there is currently an unprecedented lack of inventory on the market. Just last week, realtor.com explained:
“Nationally, the number of homes for sale was down 39.6%, amounting to 449,000 fewer homes for sale than last December.”

It’s important to remember that there weren’t enough homes for sale even then, and inventory has only continued to decline.

The market has the potential to absorb half a million homes this year without it causing home values to depreciate.

Bottom Line
The pandemic has led to both personal and economic hardships for many American households. The overall residential real estate market, however, has weathered the storm and will continue to do so in 2021.


The information contained, and the opinions expressed, in this article are not intended to be construed as investment advice. Marshall Malone does not guarantee or warrant the accuracy or completeness of the information or opinions contained herein. Nothing herein should be construed as investment advice. You should always conduct your own research and due diligence and obtain professional advice before making any investment decision. Marshall Malone will not be liable for any loss or damage caused by your reliance on the information or opinions contained herein
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Pre-Approval is Key

1/15/2021

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 ​Why Pre-Approval Is Key in 2021
Today's housing market is highly competitive for homebuyers, so it's critical to gain every advantage in the process that you can. Let's connect to make sure pre-approval is one of the first steps you take toward homeownership this year.
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Things to avoid after applying for a mortgage

1/15/2021

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​Some Highlights
  • There are a few key things to make sure you avoid after applying for a mortgage to help make sure you still qualify for your loan at the closing table.
  • Along the way, be sure to discuss any changes in income, assets, or credit with your lender, so you don’t unintentionally jeopardize your application.
  • The best plan is to fully disclose your intentions with your lender before you do anything financial in nature.
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The Do’s and Don’ts after Applying for a Mortgage

12/21/2020

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Once you’ve found the right home and applied for a mortgage, there are some key things to keep in mind before you close. You’re undoubtedly excited about the opportunity to decorate your new place, but before you make any large purchases, move your money around, or make any major life changes, consult your lender – someone who is qualified to tell you how your financial decisions may impact your home loan.
Below is a list of things you shouldn’t do after applying for a mortgage. They’re all important to know – or simply just good reminders – for the process.

1. Don’t Deposit Cash into Your Bank Accounts Before Speaking with Your Bank or Lender. 
Lenders need to source your money, and cash is not easily traceable. Before you deposit any amount of cash into your accounts, discuss the proper way to document your transactions with your loan officer.

2. Don’t Make Any Large Purchases Like a New Car or Furniture for Your New Home. 
New debt comes with new monthly obligations. New obligations create new qualifications. People with new debt have higher debt-to-income ratios. Higher ratios make for riskier loans, and then sometimes qualified borrowers no longer qualify.

3. Don’t Co-Sign Other Loans for Anyone. 
When you co-sign, you’re obligated. With that obligation comes higher ratios as well. Even if you promise you won’t be the one making the payments, your lender will have to count the payments against you.

4. Don’t Change Bank Accounts. 
Remember, lenders need to source and track your assets. That task is significantly easier when there’s consistency among your accounts. Before you transfer any money, speak with your loan officer.

5. Don’t Apply for New Credit. 
It doesn’t matter whether it’s a new credit card or a new car. When you have your credit report run by organizations in multiple financial channels (mortgage, credit card, auto, etc.), your FICO® score will be impacted. Lower credit scores can determine your interest rate and maybe even your eligibility for approval.

6. Don’t Close Any Credit Accounts. 
Many buyers believe having less available credit makes them less risky and more likely to be approved. Wrong. A major component of your score is your length and depth of credit history (as opposed to just your payment history) and your total usage of credit as a percentage of available credit. Closing accounts has a negative impact on both of those determinants of your score.
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Bottom Line
Any blip in income, assets, or credit should be reviewed and executed in a way that ensures your home loan can still be approved. If your job or employment status has changed recently, share that with your lender as well. The best plan is to fully disclose and discuss your intentions with your loan officer before you do anything financial in nature.

The information contained, and the opinions expressed, in this article are not intended to be construed as investment advice. Marshall Malone does not guarantee or warrant the accuracy or completeness of the information or opinions contained herein. Nothing herein should be construed as investment advice. You should always conduct your own research and due diligence and obtain professional advice before making any investment decision. Marshall Malone will not be liable for any loss or damage caused by your reliance on the information or opinions contained herein.
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5 steps if you need forbearance relief

12/18/2020

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Forbearance programs are helping homeowners manage their monthly mortgage payments right now. Let's connect and follow-up with your lender to make sure you have the information you need to make a confident decision.
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Greenhorn's wanted - This ranch could be yours

12/17/2020

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480 Acres
$3,600,000

Dream of owning your own ranch? Want to get out of the city?
​
The Flying X Ranch is a magnificent Hill Country ranch, near San Antonio, that features spectacular vistas of the surrounding countryside, seasonal live water from rivers, springs, creeks and a beautiful historic rock homestead. This ranch is conveniently located to San Antonio, being on the north-east side of Bandera County just west of Pipe Creek. Flying X Ranch’s frontage on Highway 16 will appeal to the investors, developers and your typical recreational ranch buyers alike. The Flying X Ranch has been under the same family ownership since the 1960’s and has only had two other owners dating back into the 1800’s.

Wildlife:
The Flying X Ranch is home to your typical native Texas hill country wildlife that includes whitetail deer, turkey, coyotes, foxes, dove, hogs, and songbirds. In addition, an occasional axis deer can be spotted on the ranch.

Terrain:
This panoramic Hill Country ranch has a wide range of terrain, topography, vegetation, and water. The ranch features dramatic cliffs and unique rock formations that follow along with the banks and channels of Privilege Creek and the Medina River. Along these ridges are vistas that offer stunning views of the surrounding Hill Country. With a mix of hills, valleys, and small pastures, the ranch has a diverse vegetation. This vegetation consists of a wide variety of oak trees, pecans, elm, mesquite, and cedar. The pastures and open areas of the ranch are home to native grasses of the Texas Hill Country.

Improvements:
The ranch has a beautiful 3,000 square foot historic rock home that is accented with wood finishes and a metal roof. This home features a front porch that overlooks a wonderfully landscaped yard with view of the hill county. The yard has large oaks and pecans. Another unique feature of the landscaping is the rock fence that was built from rocks found along Anderson Hollow. The interior of the house has gorgeous rock walls, hardwood floors, and two fireplaces.

Water:
The water features on the ranch are the major highlight of the property. With frontage on the Medina River, a major creek in Privilege Creek and a stunning grotto called Anderson Hollow. These water features provide the ranch with beautiful scenery. Although the stretch of the Medina River is not actively flowing at this time, it has flowed a majority of time in years past. Privilege Creek typically holds pools of water but it is not an actively flowing creek. A potential buyer may research the capability of engineering to build a dam on Privilege Creek.

Wells:
The ranch has one water well with a submersible pump and one windmill.

Why am I asking? After a death in my in-laws's family, the ranch is ready for a new generation.  Maybe that is you.  Contact me and let me know if it is.

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3 Reasons to Be Optimistic about Real Estate in 2021

12/16/2020

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​This year will be remembered for many reasons, and optimism is one thing that’s been in short supply since the spring. We’re experiencing a global pandemic, social unrest, an economic downturn, and natural disasters, just to name a few. The challenges brought on by the health crisis have also forced many homeowners to reevaluate their space and what they need in a home going into 2021. So, experts are forecasting that next year is one in which we can be optimistic about real estate for three key reasons.

1. The Economy Is Expected to Continue Improving
Tim Duy from the University of Oregon puts it this way:
“There is nothing fundamentally ‘broken’ in the economy that needs to heal…there was no obvious financial bubble driving excessive activity in any one economic sector when the pandemic hit…With Covid-19 cases surging again, it is understandably hard to look optimistically to the other side of this winter…Don’t let the near-term challenges distract from the economic stage being set for next four years.”

2. Interest Rates Are Projected to Stay Low
In the latest projections from Freddie Mac, interest rates for a 30-year fixed-rate mortgage are expected to remain at or near 3% next year. These low rates will continue to make homes more affordable, driving demand for housing in 2021.

3. Future Home Sales Are Forecasted to Grow
While the economy improves and interest rates remain low, homes are also expected to continue appreciating as more people buy in the coming year. Danielle Hale, Chief Economist at realtor.com, says:
“We expect home sales in 2021 to come in 7.0% above 2020 levels, following a more normal seasonal trend and building momentum through the spring and sustaining the pace in the second half of the year.”

Bottom Line
Experts forecast that buyers and sellers are going to be active in 2021. If you’ve thought about buying or selling your home this year but have held off, now may be the time to take advantage of this market. Let’s connect to take the first step toward your new home today.

The information contained, and the opinions expressed, in this article are not intended to be construed as investment advice. Marshall Malone does not guarantee or warrant the accuracy or completeness of the information or opinions contained herein. Nothing herein should be construed as investment advice. You should always conduct your own research and due diligence and obtain professional advice before making any investment decision. Marshall Malone will not be liable for any loss or damage caused by your reliance on the information or opinions contained herein.
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5 Reasons to Sell Your House This Holiday Season

12/7/2020

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This holiday season may be the perfect time to sell your house. Let's connect to discuss how today's buyer demand is presenting the greatest opportunities for sellers.
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With Home Values Surging, Is it Still Affordable to Buy Right Now?

12/2/2020

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Housing inventory is at an all-time low. Realtor.com just reported that there are 39% fewer homes for sale today than there were last year. At the same time, buyer demand remains strong. In a recent newsletter, research analyst Ivy Zelman explained:
​
“Although the headwind of severe supply constraints in most markets has contributed to slight moderation in seasonally-adjusted and year-over-year new pending contract growth for two consecutive months (albeit still growing strongly), the underlying strength of buyer demand, particularly for this time of year, remains apparent.”

Whenever there’s a shortage in the supply of an item that’s in high demand, the price of that item increases. That’s exactly what’s happening in the real estate market right now. As a result, home values are surging.
This is great news if you’re planning to sell your house. On the other hand, as either a first-time or repeat buyer, this may instead seem like troubling news. Purchasers, however, should realize that the price of a house is not as important as the monthly cost. Here’s how it breaks down.

There are several factors that influence the cost of a home. Two of the major ones are:
  1. The price of the home
  2. The mortgage rate at which a buyer can borrow the funds necessary to purchase the home

​How do these factors impact affordability?
The National Association of Realtors (NAR) produces a Housing Affordability Index which takes these factors into account and determines an overall affordability score for housing. According to NAR, the index:
“…measures whether or not a typical family earns enough income to qualify for a mortgage loan on a typical home at the national and regional levels based on the most recent price and income data.”
Their methodology states:

“To interpret the indices, a value of 100 means that a family with the median income has exactly enough income to qualify for a mortgage on a median-priced home. An index above 100 signifies that family earning the median income has more than enough income to qualify for a mortgage loan on a median-priced home, assuming a 20 percent down payment.”

So, the higher the index, the more affordable it is to purchase a home. Here’s a graph of the index going back to 1990:
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​The blue bar represents today’s affordability. We can see that homes are more affordable now than they were from:
  • 1990 to 2008
  • 2017 to 2018
Buying a home today is just a little less affordable than it was last year, but still very affordable compared to historical housing market trends.
Note: During the housing crash from 2009 to 2015, distressed properties (foreclosures and short sales) dominated the market. Those properties were sold at large discounts not seen before in the housing market.

Why are homes still affordable today?
The number one factor impacting today’s homebuying affordability is record-low mortgage rates. There’s no doubt that prices are on the rise. However, mortgage rates have fallen dramatically. Last week, Freddie Mac announced that the average interest rate for a 30-year fixed-rate mortgage was 2.72%. Last year at this time, the average rate was 3.68%.

If you’re considering purchasing your first home or moving up to the one you’ve always hoped for, it’s important to understand how affordability plays into the overall cost of your home. With that in mind, buying while mortgage rates are as low as they are now may save you quite a bit of money over the life of your home loan.

Bottom Line
At this point, home purchase affordability is still in a historically good place. However, we need to watch price increases going forward. As Mark Fleming, Chief Economist at First American, noted in a recent post:

“Faster nominal house price appreciation can erode, or even eliminate, the boost in affordability from lower mortgage rates, especially if household income growth doesn’t keep up.”

The information contained, and the opinions expressed, in this article are not intended to be construed as investment advice. Marshall Malone does not guarantee or warrant the accuracy or completeness of the information or opinions contained herein. Nothing herein should be construed as investment advice. You should always conduct your own research and due diligence and obtain professional advice before making any investment decision. Marshall Malone will not be liable for any loss or damage caused by your reliance on the information or opinions contained herein.
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the economic impact of buying a home

11/13/2020

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When you buy a home, you're making an impact on our local economy. Let's connect today to explore your homebuying options together..

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    Marshall Is...

    ...a third generation realtor. His brothers, parents, and grandfather were all realtors in Alabama. He has spent much of his life as an entrepreneur, having started 4 businesses, and he considers hospitality a key element in everything he does. Marshall will go the extra mile for you. 

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