The housing market is far from recovery.  It is too easy for someone who is underwater to decide it is time for a fresh start.  BK!  I am afraid the stigma of bankruptcy might go away. The mindset might just become “If GM can do it, why can’t I.”.  Well, you don’t have billions in taxpayer dollars to play with.

One in Four Borrowers Is Underwater – WSJ.com.

Holy cow.  Look at how bad the mortgage application numbers are.  This on top of continued unemployment does not signal a true recovery.

The Market Composite Index, a measure of mortgage loan application volume, decreased 13.7 percent on a seasonally adjusted basis from one week earlier.  On an unadjusted basis, the Index decreased 22.4 percent compared with the previous week.

A decrease of 22.4%. Wow.

Is housing in trouble?

via Mortgage Applications Decrease in Latest MBA Weekly Survey.

I am a bit perplexed by a couple of things.

1. With the relatively poor housing numbers this  morning, why are the housing stocks headed up? ie: BZH, HOV, etc.
2. How is the commercial real estate market holding up?  Read below.

Fitch Announces Expanded Review of U.S. Bank Commercial Real Estate Exposure.

Is housing in trouble?

Odd as it may seem, Buffalo NY (my home town) appears to be making it through the financial meltdown fairly well.

This area never saw an uptick in the local economy as other areas around the country had.  Our real estate prices remained rather stable and growth can now be seen in some areas.

If you are an investor looking for a market to purchase cash flow positive property in… look to Buffalo NY.

Buffalo bond rating keeps rising

via Buffalo bond rating keeps rising – Business First of Buffalo: .

Buffalo NY is an interesting place to live.  People who have experienced the big downtrend in real estate will often ask about our real estate market in Buffalo and the suburbs (where my family lives).   What I like to say is, when you don’t experience the move up, you shouldn’t experience the move down.  That has been the case for the most part.  Values in suburban Buffalo have held steady in many areas.  In fact, I sold a property in November of 2008 three weeks after it was listed.

The Buffalo area is an inexpensive place to live.  Housing is reasonable.  In fact, you can often own a home for about the same price that you would pay to rent a home or apartment.  That is the case even before factoring in the depreciation write off or the mortgage interest write off.  If you can qualify for a mortgage, the Buffalo market is a good one.

Buffalo NY Real Estate

Here is another theory to contemplate.  With fewer folks able to qualify for a mortgage, what do you think that rental rates will do?  I’ll give you 2 guesses.   In the recent past, banks would finance virtually anyone with an income.  Shady mortgage brokers often took care of the rest (proof of assets, etc).  Those days are gone.  Thank goodness.  Investment property might be a very good place to be right now.  The higher rents should lead to higher future sales, those higher future sales will lead to a continued move up in the Buffalo housing market.

If you are an investor looking for cash flow, consider Buffalo and its suburbs.  Housing is relatively cheap.  Help us catch up on some of the gains that we didn’t experience in the past 10 years.

1Q median home prices up in Buffalo – Business First of Buffalo: .