Atlanta Real Estate: Rent Versus Buy

Christmas is a good time to root for the underdog. People feel charitable; they want others to have happiness, a peace of mind.

But if you pay attention to the real estate market, underdogs are everywhere, and charity is scarce. So what, in this time of giving, is the best thing to hope for.

Some might argue the best thing for jeopardized homeowners is leniency from their mortgage companies. This provides short-term relief for homeowners who are not able to meet their mortgage payments. It allows people to keep their homes, salvage their credit, and pull themselves out of debt. But it can also extend a loan for up to 40 years. Over that length of time, property values typically decrease, so the owner pays more per month than what the property is worth.

Others might argue for nothing to happen. Keep interest rates high. Let people see and learn from their mistakes. Lose their homes. Grow debt. Foreclose on their property. Why, the argument goes, should responsible tax payers have to pay for the mistakes of somebody else's poor investment?

Depending on your situation, you probably feel strongly one way or the other.

A recent article in the Atlanta Journal Constitution reported on the issue. Speaking about interest rates on loans being cut, Emory professor Frank Alexander said:

"It may be of some benefit to borrowers who are likely to go into foreclosure. But it would provide relief only in the short term. This does not provide long-term solutions to problem mortgages. Most of these programs provide no measurable help to people who are in mortgages they should not be in.”

This is true. And it might change some opinions. But for people in a tight spot, a quick fix, no matter its long-term implications, is needed more than anything else.

The article continues:

"Alexander stressed that the programs offered so far typically try to lower the payment for about three years by cutting the interest temporarily and extending the loan to 40 years. He noted that is similar to many of the “teaser rate” loan products people got in the past few years that let people buy more houses than they could truly afford. So, a lower rate short term might bring the same kind of crisis later when the rates adjust upward."

People have individual problems. But as a nation, we must consider things on a bigger level. Nobody wants the mortgage crisis to last. Nobody wants thousands of people to foreclose on property. It is bad for real estate and bad for the economy.

But if such rate cuts are offered to homeowners, what will the state of the market be in 10 years? It is imperative now to employ foresight. If a homeowner is in danger of falling into foreclosure, he or she should work with their bank as much as possible. Homeowners have more clout now that they did last year. If nothing can be done, the home should go into foreclosure. The owner relinquishes payments and starts anew.

Foreclosures will increase. In December, Atlanta has nearly 7,000 pending foreclosures. Expect more. The market will saturate. Property prices will fall. Soon, when the economy perks, it will be an ideal time to buy.

Meantime, people in foreclosure should be working towards financial balance. Atlanta is as expensive as any other city when it comes to renting an apartment. It is equally difficult now, with the high number of renters, to find a suitable, temporary dwelling. But so far, rental prices have not skyrocketed. It is a good time to rent, to find that financial balance and develop strategy. The Atlanta real estate market is volatile. Soon, it will show its strength again.

Renters should visit Promove for more information on Atlanta Apartments.