Not Saying There’s a Housing Bubble But…

Record Debt Outstanding

Over the past couple of months the big banks (Wells Fargo & Co., Goldman Sachs Group Inc. and J.P. Morgan Chase & Co.) have begun offering credit lines to lenders that specialize in house flipping (investor buys a property, makes updates then quickly resells it). The amount of loans outstanding for house flippers neared $48 billion in 2016. That’s the highest since 2006, the peak of the housing bubble. Through the 3rd quarter of 2016 the number of home flippers hit it’s highest level since 2007. House flipping deals tend to typically be done with cash, however in 2016 one third of the deals were made with debt. That’s the highest in over 8 years!

Low Doc Loans Making a Comeback?

Home prices nationwide are the highest they’ve been since the 2008 crash. Some borrowers have reported that they’ve been offered loans that exceed the value of their homes. Others have reported that lenders are relaxing their loan requirements by requiring bank statements but not the standard W-2 tax documents. Additionally more and more people are getting in on the flipping action. Seminars are popping up left and right teaching people how to flip homes and promising boatloads of cash. The average flip nets approx $61k, this is up from $19k at the bottom of the crash in 2009.

If It Walks Like a Duck and Quacks Like a Duck…

Hmmmm I’m not saying a bubble is brewing, but c’mon son, judging from the previews this movie is looking pretty familiar. It might be time to start slowly increasing our cash positions in order to be able to take advantage of opportunities and/or ride out the storm in the event of a downturn. The economy naturally tends to correct itself every 10 or so years and guess when the last recession occurred, 2007.

Martel

 

 

4 Benefits Of Stepping Outside of the Box: Take that Risk

“Whatever you can do or dream you can do, begin it. Boldness has genius, power and magic in it.” Goethe

Plan your work and then take that leap of faith. A wise person once said “You can’t steal second base while keeping one foot on first.” Progress requires a bit of risk taking.  Like Goethe mention’s in the quote, the very act of beginning is empowering and has genius. You’ll be surprised at how quickly you learn by doing and the progress that can be made by adapting from the lessons learned. The phenomenon that ensues from taking the first steps manifest in many ways, including new opportunities that seem to magically appear as people get wind of your endeavors.

4 Benefits of Risk Taking:

  • Taking Risks Helps You Grow – It’s a universal law that in order to grow in personal and professional development you need to step out of your comfort zone. How can one grow if you don’t challenge yourself? Reaching for new heights involves stretching for goals just outside of our reach.
  • Taking Risks Makes You More Creative – With the experience of having taken a risk you broaden your base of knowledge, which enables you to apply the experiences toward creating solutions for other problems.
  • Taking Risks May Lead to Failure – Whoa! Did I just say failure is a benefit? Yes, failing can be a benefit. By failing and I mean failing fast you quickly evolve and move on to discover approaches that bring you closer to your desired outcome. The reward can be significantly greater than maintaining the status quo and besides there’s plenty of risk in just maintaining the status quo believe it or not, just ask Blackberry…
  • Taking Risks Will Get You More Comfortable With Taking Additional Risks – Taking risks can lead to additional calculated risks which in turn helps you get more comfortable with stepping out of the comfort zone and leads to more growth and opportunity.

Martel