We can’t figure it out. Is the Chronicle reporting locally, or nationally when they’re trying to scare us into thinking all is lost in real estate?

Here’s the Headline: “Study expects 1.1 million foreclosures, Those with adjustable mortgages are most likely losers, even with conventional loans.” Read the article here.

But hidden way in the middle is this: “The study does not break out statistics by region, but the Bay Area will be hurt less than other parts of California and the country as a whole, said Christopher Cagan, director of research and analytics for First American CoreLogic and the study’s author.”

Let’s break it down to the extreme basics.  Basing appreciation and price increases off of averages is, in our humble opinion, not the best way to go.  On average, people aren’t all buying their homes at the same time.  If you bought last year, and need to sell this year, yes, you’ll probably lose some money.  If your ARM is coming to the end of it’s low rate and about to adjust to a much higher rate and you can’t afford the payments, you may be in trouble.  However, we’d be willing to bet there are mortgage brokers that could figure something out for you.  Don’t go it alone. 

But if you bought ten years ago and need to sell this year, you’ll be walking away with a pretty fat check in your pocket, regardless of whether prices are up this year vs. last year.  N’est ce pas?  Sure, you maybe could have made more by selling two years ago, but if you sell this year your house still appreciated from when you bought it.  Non?  That is the extreme basics, and doesn’t take into consideration anything other than purchase vs. sale price, so don’t get all hot and bothered about adjusting for inflation, interest payments, or any of that. 

In real estate, it all comes down to timing, thinking long-term, and whether you see the cup as half full or half empty.   We see the dip in prices as an excellent time to buy, and the potential for more renters (think sub-prime media madness) as an excellent time to think about purchasing rental property.   

–Read the article here [sfgate]
–Scary Math…Indeed [sfn blog]
–Need a magnifying glass? [sfn blog]
–Stats & Numbers [sfn blog]