Hello Everyone!

I was out of the office last week attending the National Association of Real Estate Editors Conference in Philadelphia. This is where I typically learn about real estate trends, get story ideas for writing articles and, of course, meet and network with many other writers and journalists in the real estate field.

This year there was talk about foreclosures hitting the real estate industry big time. Much of this had to do with subprime mortgage lending practices. As a rule I don't feel that this really hits the vacation home/vacation rental market too hard. And to date, I haven't known of foreclosures hitting vacation home markets.

But never say never. I have spoken with some real estate agents in vacation home markets who say that the sales market is softening. In some areas, where there were a lot of speculators (people who bought with no intention of ever occupying or renting—just to do a quick flip) market prices are dropping significantly. This generally leads to high inventories of homes on the market and, yes, even to foreclosures. If you are in a market where real estate prices are dropping, and you have an adjustable rate mortgage—traditional ARM or interest only ARM— this might be a good time to refinance your property.

Let's say you took out an interest only loan for your home that was valued at $250K and put 20% down ($200K mortgage.) If the property values are going down, you might be in a situation where your home will not appraise for your mortgage amount making it impossible to refinance.

While this example may be an edge case—isolated to a few key geographic areas (Southeast Florida and California to name a few)— if you hold an adjustable rate mortgage you may want to look into refinancing now rather than later.

Happy Renting by Owner!

Christine

If you're interested in hearing Christine speak at one of her upcoming seminars, visit the Seminar Schedule for more information.

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