Vacant Home Sales now identifies Short Sales and Bank Owned Properties separately from the other vacant homes that are on the market.  I have identified over a dozen Short Sales and Bank Owned Properties in Maplewood NJ and one in Summit NJ that is brand new and asking $1,825,000.  If you think that this is the kind of property that you are interested in, please take a look.  You will not find this list anywhere else.  See this list at JayNadelson.com

The Fed said it would buy up to $100 billion in debt issued by Fannie Mae, Freddie Mac, and the Federal Home Loan Banks.  It also said that it would buy up to $500 billion in mortgage-backed securities backed by Fannie Mae, Freddie Mac, and Ginnie Mae ("the GSEs").

This is huge for the housing market. While the rates of Treasuries have fallen to historically low levels in a massive flight to quality, the paper issued by the GSEs have stubbornly refused to rally, and continue to trade at wide premiums.  The market was buying 10-year Treasuries at a yield of 3% and bypassing 10-Year government guaranteed FNMAs at 4.5%.  Why?  Because there was a perception the government guarantee wasn't ironclad.

Now the Fed will buy the GSE paper and sell treasuries, making a 1.50% spread on the transaction.  Treasury Secretary Paulson, the great arbitrageur is showing his Goldman Sachs roots in this trade.   Everyone should be doing this trade, but doing so requires room on a corporate or bank balance sheet.  The Fed has virtually unlimited room to do this trade.  The result is that the Treasury - Mortgage spread will narrow.

The key point of this is that the rate the GSEs pay for new mortgages is determined by the price its debt trades at in the open market.  I would expect that by this time next week, 30-year mortgage rates will fall at least 25 basis point to around 5.75%.  What will that mean to housing prices.  Lower monthly payments will equate to an immediate increase in value of existing homes of 3%.  As mortgage rates continue to fall, housing values will be bolstered.  You should download my mortgage calculator and check the numbers yourself.

I have a new customer who was looking for investment properties in the Morristown area.  I showed them all of the two families in that area and we found a fully rented short sale that has positive cash flow after paying the mortgage and taxes.  We looked at the property twice, once at night and then again in the day. 

We presented an offer today, and the indication from was that it was sufficient for the bank.  We are waiting for the final approval.  They required that the buyers get pre-qualified for a mortgage by Countrywide and they are looking at a 7 3/8% rate with 20% down.  The rate is high because they are not planning on using it as a primary residence.  Our local Weichert mortgage specialist indicated that now you need to put 25% down to get a favorable rate on a multi-family home.

With the property in Westfield that we are negotiating on, we have narrowed the gap very signigicantly.  Unfortunately at this time, my customers are focused on getting ready for a trip to Asia and I have to wait 10 days to try and push this further along.

See more at my website... jay.nadelson.com

That’s the headline in the Roman Times 2,000 years ago (approx).  The NY Time reports the Congress held hearings while the Auto Industry goes into Chapter 11.  Didn’t they learn when they let Lehman go under?  What are they thinking.  The elected member of congress(well many of them have been sent back home) have no idea what is going on and I find it disturbing. I had dinner with a friend tonight who is involved in the Maritime business.  Ships that three months were leased for $100,000 a day (yes, a day) are now going begging for $5,000 a day.  There is no cargo moving around the world.  Commerce is coming to a standstill.  The people who own these boats borrowed money based on being able to lease them.  Where are the banks going to park all of these repo’d cargo ships?  There are thousands of boats that have lost $60,000,000 in value.  All of this information scares the hell out of me.

Visit my website for more Real Estate News at Jay.Nadelson.com

As long as we have an overhang of unsold properties on the market, housing start will continue to fall and should continue to fall.  All of my buyers are looking for bargains and I can show a lot of inventory of Vacant homes.  I have a list of Vacant Homes for Sale.  Buyers are looking for bargains and there are many out currently available.  When you can buy a home for significantly under the cost of building one, the smart customer buys at a discount.  When there are so many discounts, why build a new home.  It is basic economics.  Buy at a discount.  When the discounts disappear as they most certainly will, new home construction will start to pick up again.

Foreclosure/Vacant/Bank Owned/REO/Short Sale and Distressed Homes now on Web Site

Foreclosure/Vacant/Bank Owned/REO/Short Sale and Distressed Home listings are now posted on the web site  www.JayNadelson.com  Go to the Vacant Home Sales tab.  This took quite some time to do.  I have been working on getting this up for about a week now.  I took at every new listing in these towns at least twice a week and scour them to determine which ones are distressed.  Most are vacant for some reason or another.  If they are vacant, don’t you think that someone owns too many houses.  There have to be some great bargains here.  That’s my job.  Show you the best deals in the market.  Let me know what additional towns I need to get up in this link.

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