60 Minutes ran a story a couple weeks ago on the second wave of foreclosures we are going to face as "Alt-A" and Option arm loans start resetting. The numbers thrown out on the program pegged the value of these loans in the the $1.5 Trillion range. If you watched the interview it made you think the bottom was going to fall out on the real estate market and homes values would be following stock values into an Abyss.
Let me say there were some very good points made on the show. However, real estate is local. It always has been and always will be . Yes there certain factors that impact real estate on a national level. (Interest rates being one) But for the most part real estate values are driven by local characteristics. As a real estate broker and appraiser I have been involved in thousands of real estate loan transactions over the past decade. This includes both purchase money mortgages and refinances. Sure we had our share locally of Sub prime mortgages, 100%+ LTV Loans, No doc loans, etc. However generally speaking we had a much lower number then other areas. I just took a look at a Federal Reserve Map of sub-prime mortgages. New York State as a whole had about 16/1000 loans rated as sub-prime. This compares to about 30/1000 for States like California, Nevada, and Florida. In upstate, it is my guess that "Alt-A" and option arms made up a much smaller percentage of loans then it did downstate or in other states. I simply have not seen that many come across my desk. One reason- our median home price is still around $200,000 which is much lower then many other areas of the country. In some areas, option arms were the only possible way borrowers could even think of affording monthly payments.
According to realty Trac nationally foreclosure in November 2008 were up 28%. However, Realty Trac reports the Albany NY market had a 20% decrease in foreclosures in November over a year ago. Realty Trac also pegs Albany NY as number 202 on the list of MSA's with the highest rate of foreclosures.
Rates are great and obtainable below 5% on a 30 year fixed rate mortgage in some cases. Remember real estate remains local. Don't let the national media scare you out of the Albany NY Real estate market. Have questions? Visit me online at Albany NY Real Estate
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