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Economic News

The unintended consequences of (the forthcoming) foreclosures



The consequences

4515232151_1c8d252e34_mThe likelihood of an influx of bank owned (REO) and previously unsold foreclosed homes about to enter the nation’s real estate market in the coming months is all too real.

Although the numbers remain a mystery, one thing is almost a guarantee… this will impact just about every homeowner from Portland, Oregon to Portland, Maine and all points in between. I’m not talking about home values declining further or even talking about the housing market as a whole becoming more unstable.

Nope, what I’m talking about is the collateral damage that will almost certainly occur and the unintended consequences to the good, hard working homeowners who’ve paid their mortgage and have lived up to their promises of being a good neighbor.

A shift in focus?

Clearly the focus to date has been on those who’ve lost their homes over the last few years…but little has been mentioned about what the impact will be on the homeowners in good standing living in these neighborhoods and communities that are baring the brunt of these foreclosures? Lost in the minutia of all this doom and gloom, there are still actual homeowners that have made their payments and still want to see their beloved community maintained. When these homes finally do sell for pennies on the dollar, who do you think will eventually own these properties?

  • First time home buyers? With rates and down payment requirements keeping many out of this arena…I’m inclined to think not!
  • Investors? Certainly these folks who are buying these homes can only live in one at a time which means they will be renting most of them out. Certainly not an enticing thought or what the current homeowners want to see, I bet!
  • Second home buyers? Maybe, but tight lending regs rule out most folks owning 2 homes unless you have a gold-plated credit score.
  • Move-up or Move-down buyers? Again, maybe…but these folks likely need to sell before they can buy.

Who do you think will be the players in this foreclosure free-for-all? Certainly leaves a great deal to the imagination…especially if you live in one of these neighborhoods or communities.

Patrick Flynn is a 13 year Veteran of this Real Estate fray and a blogger on mySeattleblogs and is active in various social networks. Like many writers at Agent Genius, Patrick wears a few hats other than a Broker's lid- he is also a Certified Real Estate Instructor for the State of Washington and has enjoyed delivering 1,000+ hours of clock hour and non-clock hour approved courses in his career. Patrick has also been a Designated Broker since 2003 and revels in being able to coach and mentor fellow real estate professionals.

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  1. stealthreinvestor

    April 13, 2010 at 9:49 am

    The unintended consequences of (the forthcoming) foreclosures

  2. Century 21

    April 13, 2010 at 4:04 pm

    The unintended consequences of (the forthcoming) foreclosures (@agentgenius)

  3. Joe Pastori

    April 13, 2010 at 4:10 pm

    RT @C21RealEstate: The unintended consequences of (the forthcoming) foreclosures (@agentgenius)

  4. topsy_top20k_en

    April 13, 2010 at 6:23 pm

    The Unintended Consequences’ of (the Forthcoming) Foreclosures.: The likelihood of an influx of bank owned (REO) a…

  5. United Country

    April 13, 2010 at 8:55 pm

    Will the wave of foreclosures heading into the market present unintended consequences? @agentgenius thinks so:

  6. anthonys indianapolis homes for sale

    April 18, 2010 at 2:28 pm

    The question is, how large is this shadow inventory? Regardless, there can be no doubt that any swell in inventory can only make things worse, at least in the short term. On the upside, the market WILL eventually absorb the inventory. Real estate is a finite resource, and the population is still growing, The market will correct itself; it’s only a matter of how many people will have to suffer in the interim.

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Economic News

Is the real estate industry endorsing Carson’s nomination to HUD?

(BUSINESS NEWS) Ben Carson’s initial appointment to HUD was controversial given his lack of experience in housing, but what is the pulse now?



NAR strongly backs Dr. Carson’s nomination

When President-Elect Donald Trump put forth Dr. Ben Carson’s name as the nominee for Secretary of Housing and Urban Development, NAR President William E. Brown said, “While we’ve made great strides in recent years, far more can be done to put the dream of homeownership in reach for more Americans.”

At the time of nomination, the National Association of Realtors (the largest trade organization in the nation) offered a positive tone regarding Dr. Carson and said the industry looks forward to working with him. But does that hold true today?

The confirmation hearings yesterday were far less controversial than one would expect, especially in light of how many initially reacted to his nomination. Given his lack of experience in housing, questions seemed to often center around protecting the LGBT community and veterans, both of which he pledged to support.

In fact, Dr. Carson said the Fair Housing Act is “one of the best pieces of legislation we’ve ever had in this country,” promising to issue a “world-class plan” for housing upon his confirmation…

>>>>>Click to continue reading…<<<<<


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Economic News

Job openings hit 14-year high, signaling economic improvement

The volume of job openings is improving, but not across all industries. The overall economy is improving, but not evenly across all career paths.



young executives

job openings

Job openings hit a high point

To understand the overall business climate, the U.S. Labor Department studies employment, today releasing data specific to job vacancies. According to the department’s Job Openings and Labor Turnover Survey (JOLT) for April, job openings rose to 5.38 million, the highest seen since December 2000, and a significant jump from March’s 5.11 million vacancies. Although a lagging indicator, it shows strength in the labor market.

The Labor Department reports that the number of hires in April fell to 5 million, which indicates a weak point in the strong report, and although the volume remains near recent highs, this indicates a talent gap and highlights the number of people who have left the labor market and given up on looking for a job.

Good news, bad news, depending on your profession

That said, another recent Department report notes that employers added 221,000 jobs in April and 280,000 in May, but the additions are not evenly spread across industries. Construction jobs rose in April, but dipped in professional and business services, hospitality, trade, and transportation utilities. In other words, white collar jobs are down, blue collar jobs are up, which is good or bad news depending on your profession.

Additionally, the volume of people quitting their jobs was 2.7 million in April compared to the seven-year high of 2.8 million in March. Economists follow this number as a metric for gauging employee confidence in finding their next job.

What’s next

If you’re in the market for a job, there are an increasing number of openings, so your chance of getting hired is improving, but there is a caveat – not all industries are enjoying improvement.

If you’re hiring talent, you’ll still get endless resumes, but there appears to be a growing talent gap for non-labor jobs, so you’re not alone in struggling to find the right candidate.

Economists suspect the jobs market will continue to improve as a whole, but this data does not pertain to every industry.


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Economic News

Gas prices are down, so are gas taxes about to go up?

Do low gas prices mean higher gas taxes are on the way? Budgeting for 2015 just got a bit more complicated, if some politicians have their way.



gas tax


Gas taxes and your bottom line

Many industries rely heavily on time in their vehicle, not just truck drivers and delivery trucks. Sales professionals hop in their vehicles throughout the day, as do many other types of professionals (service providers like plumbers, and so forth). For that reason, gas prices and taxes are a relevant line item that must be budgeted for 2015, but with politicians making the rounds to push for higher gas taxes, budgeting becomes more complicated.

Gas prices are down roughly 50 cents per gallon compared to a year ago, which some analysts say have contributed to more money in consumers’ pockets. Some believe that this will improve holiday sales, but others believe the timing is just right to increase federal taxes on gas. The current tax on gas is 18.40 cents per gallon, and on diesel are 24.40 cents per gallon.


Supporters and opponents are polar opposites

Supporters argue as follows: gas prices are low, so it won’t hurt to increase federal gas taxes, in fact, those funds must go toward improving our infrastructure, which in the long run, saves Americans money because smoother roads mean better gas mileage and less congestion.

Gas taxes have long been a polarizing concept, and despite lowered gas prices, the controversial nature of the taxes have not diminished.

While some are pushing for complete abolition of federal gas taxes, others, like former Pennsylvania Governor, Ed Rendell (D) tell CNBC, “Say that cost the average driver $130 a year. They would get a return on that investment” in safer roads and increased quality of life, he added.

The Washington Post‘s Chris Mooney points out that federal gas taxes have been “stuck” at 18 cents for over 20 years, last raised when gas was barely a dollar a gallon and that the tax must increase not only to improve the infrastructure, but to “green” our behavior, and help our nation find tax reform compromise.

Is a gas tax politically plausible?

Mooney writes, “So, this is not an argument that a gas tax raise is politically plausible — any more than a economically efficient tax on carbon would be. It’s merely a suggestion that — ignoring politics — it might be a pretty good idea.”

Rendell noted, “The World Economic Forum, 10 years ago, rated us the best infrastructure in the world,” adding that we “need to do something for our infrastructure, not in a one or two year period, but over a decade.”

Others would note that this rating has not crumbled in just a few years, that despite many bridges and roads in need of repair, our infrastructure is still superior to even the most civilized nations.

Regardless of the reasons, most believe that Congress won’t touch this issue with a ten-foot pole, especially leading up to another Presidential campaign season starting next year.

“I think it’s too toxic and continues to be too toxic,” Steve LaTourette (the former Republican congressman best known for his close friendship with his fellow Ohioan, Speaker John Boehner) tells The Atlantic. “I see no political will to get this done.”

Whether the time is fortuitous or not, and regardless of the positive side effects, many point to a fear of voters’ retaliation against any politician siding with a gas hike, so this matter going any further than the proposal stage is unlikely.

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