Real Estate Reflections for 2011 and the Kardashians

To compile a time capsule of the year 2011, there was an obsession with the Royal Wedding, drama with marriages and divorces (Kim Kardashian and Kris Humphries) and Lindsay Lohan’s woes.

But there have been other dramas — of the real estate kind, all obsessions in real estate.

Here are five issues, questions and riddles that have had real estate consumers nearly as fixated this year as they were on the Kardashians:

1.  Tricks to fix missed mortgage payments. If I had a dollar for every time someone called or emailed me to ask how to resolve the issue that they’ve fallen behind on their mortgages. It is the same in all of California, thedistressed homeowners’ program has increased the number of borrowers

that it will help and I REALLY hope that it can help some people who really need it.

Short sales work and it recently occurred to me that many of these folks are looking for a trick — a workaround to keep their houses without having to go any of these routes.

Unfortunately, the only surefire way I know of to “fix” a delinquent mortgage and keep the home with minimal credit damage is to take a second job, cut back on expenses, and catch up on the payments or just accept that the real estate market is not going to skyrocket anytime soon even if I wish it would at least go up.

2.  Interest rates — how low will they go? More Americans are obsessed with the home price than the interest rate, it is the lowest it’s been in 50 years and makes moving into a home SO MUCH easier and affordable for buyers today.

3.  Homeowners who are stuck in upside-down mortgages (owing more than their homes are worth) have practically salivated after super-low rates all year, while buyers and refinancers have suffered through days, even weeks, of breathless anxiety about the possibility of locking their rates too soon.

4. Real estate remorse. Buyers fear they’ve paid too much. Sellers fear the buyers have paid too little. The relatively few homeowners who have gotten their home loans modified wondered if they could have negotiated harder and gotten their mortgage principal reduced or a lower payment.

Those who’ve lost homes involuntarily wonder if they might have been able to do something to save their places; those who’ve walked away wonder if they made the right move. And any and everyone who has locked in an interest rate on a home loan, then noticed that rates kept dropping, has spent the time since wallowing in or at least occasionally visiting the land of real estate remorse.

4. Walk away or stay? The second-most frequently asked question that hits my inbox is whether or not the writer should stay put in their deeply upside-down home, or should walk away from it, strategically defaulting on their mortgage.

There is no one-size-fits-all answer to this question, as many of the people who think they are facing the issue of defaulting cannot, in fact, afford to stay in their homes and so are actually debating what seems like a decision but is actually an inevitable road to foreclosure (at worst) or short sale (at best).  A good rule of thumb….be truthful with the bank regarding whether or not you have a true hardship.

5. Rent or buy? While you’d think low, low prices and low interest rates would send homebuyers into the market, scouring for deals, the fact that home prices have hit dips in some areas has actually caused more homebuyer fence-sitting.

On top of that, the whole nation is experiencing real estate PTSD (post-traumatic stress disorder) — feeling the trauma of knowing people who have lost their homes, which makes everyone much more conscious and fearful about avoiding that same trauma.  I can’t fault you one iota, I can assure you that if you aren’t looking to flip and have a stable job that you are A-ok.

What real estate stories have you seen in 2011?