The Mortgage Note Market in 2010 |
| We're about to close one of the most interesting years in real estate market history. 2009 has been an exciting, frightening time for note buyers, mortgagors and anyone else managing a mortgage note, deed of trust or similar instrument from any angle. What can we expect over the next year? It's hard to judge. The recovery has been an uneven one, influenced by local markets, government action and fears of a relapse into failure. It's safe to say that caution is the buzzword for mortgage notes in 2010. Here's how it might manifest: |
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Multifamily Dwellings Will Become More Popular
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Multifamily properties are likely to enjoy more demand than single family homes because some homeowners have returned to renting, while professionals who would normally purchase a starter home are more likely to stick with apartments and similar accommodations because they feel less financially secure, can't find a neighborhood that looks financially healthy, or are afraid of being caught in a bad mortgage thanks to heavily publicized (and not necessarily solved) problems with institutions.
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Former Bubble Markets Will Be Slow to Recover, but Attract Portfolios
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| The housing surplus is greatest in former "bubble markets," where numerous homes have either fallen under foreclosure or (as new construction) were never purchased at all. Investors will be divided between a fear of being caught in the hype again and the incredible bargains to be had. Don't forget that while many homes were overvalued there was a good reason why markets in California, Florida were popular. As a result, properties here will be popular as forward-thinking, long term investments. It takes considerable capital and patience to invest from this perspective, so this is a game for bigger players - but remember that would-be homeowners appreciate one on one relationships, so small mortgage note investors might be able to parley this into success.
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The Demand for Private Mortgage Notes Will Increase
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Never before has the real estate market been so filled with cautious, discouraged consumers. They don't trust institutions, are afraid of falling underwater and are stuck in a situation where the market should give them the power to demand better terms, but institutional caution impedes their efforts. Private mortgage notes stand to fill this demand by providing the terms borrowers want in a small scale relationship that counteracts skepticism.
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| 2010 has opportunities if you keep your eyes open and are ready to manage your investments closely. Not everyone has the time to do this, however, so when it comes to seller-held mortgage notes, remember that you can always sell your note for cash. We provide several payment options. Get started with a no-obligation note quote and see what we can do for you.
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