June 15, 2007 — Could more bad news possibly hit the real estate market that so many active adults are studying? A quote in today’s Wall Street Journal regarding homeowners who are entering the foreclosure process is typical of recent fare – “rates for the last 2 quarters are the highest in the (Mortage Bankers Association) survey’s 37 year history.” Other bad news items in the last few days are that the number of homes for sale keeps growing (up 5% in May), and pending sales were also down in April.
Foreclosure rates are highest in many of the states where active adult communities are being built: California, Florida, Arizona, Nevada, and Georgia. While baby boomers are probably not the ones in foreclosure (except those who might have chosen to speculate), the general pall in the overall real estate market is spilling into the active adult market. Sellers find it harder to sell, buyers get warier, and banks get more restrictive. Many speculators are apparently walking away from their investments as prices go down, adding to inventory.
If you thought this is as bad as it could get, think again. Just this week interest rates rose sharply, and many experts believe that the number of adjustable mortgages coming due for big interest rate increases has not yet its peak. Those trends will only have negative effects on the market.
The continuing stream of bad news probably raises a question for baby boomers looking to buy their retirement place – is now the time to invest, or should they wait until there are some signs of good news? Many of us believe that the “retirement” market will get tight as the initial wave of retiring boomers yields to a full-fledged surge, but when is the time to strike? Post your comment, we’d like to hear your point of view!
For your information here is Topretirement’s feature article on the Question of a Real Estate Bubble