Boomer’s Blog

The trend heading into the holidays seems to be one of growing unemployment and a rising tide of homeowners drowning in mortgage debt.

An Ironic wist on a Familiar Story
The U.S. Bureau of Labor Statistics’ October report finds that unemployment last month soared to a 14-year high of 6.5 percent, as 240,000 jobs were slashed. Yet the Orange County Register’s Mortgage Insider, Matthew Padilla has made an interesting observation. He sifted through the data to report that in September,  352,200 workers were making a living in the mortgage business — that’s up from 349,300 in August.

Negative Equity Plagues Homeowners
But the recent real estate statistics that really capture the real estate investor’s eye come from  First American CoreLogic: 2.1 million mortgages are within 5 percentage points of being in a negative-equity position and 7.5 million mortgaged properties are carrying more mortgage debt than they’re worth. That means that nearly 20 percent of properties with mortgages have plunged into the powerful waves the economic undertow.

Rising Percentage of Underwater Mortgages in the States
See how the mortgages currently in negative equity break down among the states listed below (Note: percentages have been rounded off and the states are listed in descending order starting with the highest reported rate of negative equity.):

1. Nevada: 48%
2. Michigan: 39%
3. Arizona: 29%
4. Florida: 29%
5. California:  27%
6. Georgia: 23%
7. Ohio: 22%
8. Colorado: 18%
9. Arkansas: 16%
10. New Hampshire: 17%
11. Texas: 17%
12. Virginia: 16%
13. Tennessee: 15%
14. Kansas: 15%
15. Iowa: 15%
16. Alaska: 14%
17. Wisconsin: 14%
18. Nebraska: 13%
19. Kentucky: 13%
20. Missouri: 13%
21. Minnesota: 12%
22. Maryland: 12%
23. Rhode Island: 12%
24. Louisiana: 11%
25. Idaho: 11%
26. Utah: 11%
27. Oklahoma: 10%
28. South Carolina: 10%
29. Indiana: 10%
30. North Carolina: 10%
31. Illinois: 10%
32. Delaware: 10%
33. Washington D.C.: 10%
34. Massachusetts: 10%
35. New Jersey: 9%
36. New Mexico: 8%
37. Washington: 8 %
38. Oregon: 8%
39. Alabama: 7%
40. Connecticut: 7%
41. Montana: 7%
42. Pennsylvania: 6%
43. Hawaii:  6%
44. New York:  4%

Source: First American CoreLogic

Notes: Data were unavailable for Maine, Mississippi, North Dakota, South Dakota, Vermont, West Virginia and Wyoming. These data are based on 42 million properties that had a first or second mortgage, accounting for at least  80 percent of U.S. mortgages.

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Sign up either here or on the main page at GaryBoomershine.com and you’ll get the best this industry has to offer in real estate news, real estate marketing, real estate training systems, and all the creative real estate ideas that drive success in this business. Members also get exclusive access to compelling multimedia content and jaw-dropping discounts!

Don’t miss out on this opportunity to Make Tons of Cash in Real Estate! Join us today and get ahead of the pack!

You don’t need any cash or credit to buy in today’s down-turning markets. There are some especially hot, moneymaking strategies right now, depending on where you are and how you like to approach your deals. One of my personal favorites for making tons of cash is high-equity of free-and-clear real estate investing.

Why? Because by definition, properties that are owned “free-and-clear” have no mortgage debt and, as a consequence, fewer complications that can complicate or slow a deal down. Another reason I like this strategy is that the bulk of these homes are held by the most rapidly growing segment of the U.S. population: Retirees and Baby Boomers.

Experts Say Even Free-and-Clear Homeowners are Feeling the Crunch
“In the world of household balance sheets there are two Americas. Roughly two-thirds of homeowners have mortgage payments to worry about and are, to a large degree, tapped out. The other third own their homes free and clear and a lot of them have money in the bank. But they are hesitant to spend it on either a new fridge or shares of General Electric,” Forbes reported earlier this month. That’s about 24 million homeowners, many of whom are feeling the pressure of tightening credit markets — and options for when the going gets tough.

Credit Shortage Ups the Ante on Seller Motivation
Even among the 24 million free-and-clear homeowners, one-third of them are soon likely to find themselves underwater in these properties and, due to the credit crunch, they’re also facing new challenges in obtaining the easy credit to help them through the rough spots as the uncertain economy struggles for a lifeline to recovery, predicts A. Gary Shilling in an editorial slated to Appear in Forbes’ November issue.

Follow the Snowbirds to Real Estate Bargains
In a post-hot, down-turning market, such as what we’re seeing now in Florida for example, prices are dropping and properties are staying on the market for a long time. In such areas, high-equity, free-and-clear properties are a no-brainer investment bargain.

Free and Clear Market Research & Strategy
The real estate markets with the highest concentration of free and clear properties often are in areas with especially high senior citizen populations because so many of them have reached a point in their lives where their homes are completely paid off. More often than not, desire or need to downsize comes with this phase of life. These factors stimulate seller motivation to make a great deal.

In terms of geography, investors usually can find the best selections of hot free and clear properties in coastal areas. Some great current examples include:

• California,
• Florida,
• Oregon,
• Washington and
• Boston.

Free-and-Clear Markets Are Springing Up
Although they’re not  coastal areas, it’s definitely worth noting that we’ve been finding that Arizona and Utah have strong emerging — and virtually untapped free-and-clear markets just waiting for investors to come along and reap the profits.

The trick with free and clear is to go into the deal and pay 100 percent of the seller’s asking price, but do it on your own terms.  For example, the owners want $200,000 for their home and I’ll agree to that price, but pay maybe $500 per month on a zero-interest loan over the next 10 - 15 years, and I can cash flow that deal.

High-Equity Real Estate Investment Tools of the Trade
SalesTeamLive’ Free-and-Clear Done-for-You Marketing Campaigns are perfect tools for investing in high equity, free and clear properties because we’ve got the best lists for virtually any market segment and we’re constantly working on adding new technologies and refinements to ensure we’ve got the best lists out there. We’ve also got  legendary real estate genius Richard Roop writing the marketing copy that’ll make prospective clients putty in your hands.

Hedge Your Bets with Free-and-Clear Investing
Investing in properties that have no mortgage burden also a great inflation hedge, an attraction that’s growing in appeal for a growing number of Americans who’ve been watching the markets –and been feeling the gravity of our economic roller coaster ride this year.

Think about it. If we’re hitting huge amounts of inflation, milk isn’t going to be $4 per gallon; it’s going to be $10 per gallon. At that point, there are only a couple of places lefts where you can safely hedge your bets. Generally, when you have inflation, gold, silver, platinum and those types of things go up in value, but you can’t generate any income off of them.  With real estate investments, not only do you have a great hedge, you’ve got cash flow. Especially if you BUY RIGHT.

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Signing up for my monthly newsletter and special reports always is the best way to ensure you’re first to learn about the hottest real estate investment strategies, techniques and tools. When you join, you’ll also benefit from special promotions and deals I’ve brokered for the exclusive benefit of my community members.

Claim Your VIP Pass to Moneymaking Real Estate News, Marketing, Strategies & Tips
At GaryBoomershine.com, our focus is on delivering the the most timely real estate news, resources, tools and systems that build stronger real estate investment decisions and boost your bottom line.

Sign up either here or on the main page at GaryBoomershine.com and you’ll get the best this industry has to offer in real estate news, real estate marketing, real estate training systems, and all the creative real estate ideas that drive success in this business. Members also get exclusive access to compelling multimedia content and jaw-dropping discounts!

Don’t miss out on this opportunity to Make Tons of Cash in Real Estate! Join GaryBoomershine.com today and get ahead of the pack!

Long-term mortgage Interest rates rose this week to their highest levels since March, likely triggered by rising inflation, high gas prices, and dwindling consumer confidence. At the same time, home values are shrinking in every region of the United States. Can we call this a recession yet?

Mortgage Rates Take a Hike
Currently, the national average interest rate for 30-year, fixed-rate mortgages is up to 6.08 percent this week, up from 5.98 percent last week, This time last year, mortgage financing company Freddie Mac says it was 6.42 percent.

Shouldn’t this be moving the market? Not necessarily, says Freddie. As mortgage rates rise, home values continue to fall. More folks likely will be watching this selling season than the World Series.

Q1 Home Values Fizzle in Most States, All Regions
The value of U.S. homes fell 10.4 percent in the first quarter, says Freddie Mac, marking fueling the most dramatic annual dive since 1971. In the past year, Freddie’s Conventional Mortgage Home Price Index averaged 4.4 percent, the most remarkable decline in 39 years.

Freddie Mac data show that 46 states reported price drops in Q1, and 29 states measured drops over the same period last year. Only Montana, North Dakota, South Carolina and Wyoming reported price gains, however moderate, for Q1.

According to Freddie Mac’s numbers, based on the Conventional Mortgage Home Price Index Classic Series, no region in the U.S. is totally immune to the price drops that sometimes look like economic chronic wasting disease. But depending on your real estate investment strategy, there are some bright spots if you look at the big picture. Again, the real estate markets that didn’t pump-up the real estate bubble, look much more stable these days.

Regional Housing Trends
Here are are some regional housing value numbers crunched in Freddie Mac’s latest report:

West South Central Division

• Includes: Arkansas, Louisiana, Oklahoma and Texas;
• Current values reported for Q1: down 0.5 percent (-1.9 percent, annualized);
• Over the past year: home values rose 1.6 percent;
• Over the past five years, home values climbed 26.8 percent.

Middle Atlantic Division

• Includes: New Jersey, New York and Pennsylvania;
• Current values reported for Q1: down 1.1 percent (-4.1 percent, annualized);
• Over the past year: home values dropped 0.2 percent;
• Over the past five years: home values climbed 44.3 percent.

East South Central Division

• Includes: Alabama, Kentucky, Mississippi and Tennessee
• Current values reported for Q1: down 1.1 percent (-4.3 percent, annualized);
• Over the past year: home values increased 0.3 percent;
• Over the past five years: home values climbed 26.6 percent.

East North Central Division

• Includes: Illinois, Indiana, Michigan, Ohio and Wisconsin
• Current values reported for Q1: dropped 1.5 percent (-5.9 percent, annualized);
• Over the past year: home values dropped 3.8 percent;
• Over the past five years: home values climbed 9.2 percent.

Mountain Division

• Includes: Arizona, Colorado, Idaho, Montana, New Mexico, Nevada, Utah and Wyoming;
• Current values reported for Q1: dropped 1.5 percent (-5.9 percent, annualized);
• Over the past year: home values dropped 3.3 percent;
• Over the past five years: home values climbed 44.0 percent.

West North Central Division

• Includes: Iowa, Kansas, Minnesota, Missouri, North Dakota, Nebraska and South Dakota
• Current values reported for Q1: dropped 2.2 percent (-8.6 percent, annualized);
• Over the past year: home values dropped 2.3 percent;
• Over the past five years: home values climbed 16.3 percent.

South Atlantic Division

• Includes: Washington D.C., Delaware, Florida, Georgia, Maryland, North Carolina, South Carolina, Virginia and West Virginia
• Current values reported for Q1: dropped 2.6 percent (-10.1 percent, annualized);
• Over the past year: home values dropped 4.4 percent;
• Over the past five years: home values climbed 37.8 percent.

New England Division

• Includes: Connecticut, Massachusetts, Maine, New Hampshire, Rhode Island and Vermont;
• Current values reported for Q1: dropped 2.9 percent (-11.0 percent, annualized);
• Over the past year: home values dropped 4.0 percent;
• Over the past five years: home values climbed 22.2 percent.

Pacific Division

• Includes: Alaska, California, Hawaii, Oregon and Washington
• Current values reported for Q1: dropped 6.9 percent (-24.8 percent, annualized);
• Over the past year: home values dropped 12.4 percent;
• Over the past five years: home values climbed 40.1 percent.