Part of being an advisor is to warn your clients of unseen risks that lurk in the "shadows" for their home security. Protecting against predators is a no-brainer, but now a more aggressive and much more discreet thief looms in almost every neighborhood, nationwide. Losing valuables and property such as your iPad, laptop or large screen HDTV is expensive, but those things can insured.
The new bogeyman that will steal away their retirement plan and financial plan is a silent assassin that is quietly, undeterred siphoning off hundreds of thousands of dollars of your clients' money.
Worse, it's part of their safe money, the once considered "core" holding of any investment plan. It is the value of their home. No longer is owning a home considered a super safe investment for retirement or investment. Tens of thousands of homes are already owned by banks but many more will soon be foreclosed.
Untold and unimaginable numbers of homes are going to be dumped onto the real estate market unless nothing short of a miracle occurs. Home values have already dropped 25% (even more if you add in the cost of inflation) and could drop as much or more in the future.
Why? Banks are not very good landlords; In fact, they are horrible at it. Their actions could add fuel to an already out of control inferno as the banks are forced to raise liquidity (cash) to stay in business. There are already more homes for sale than there are buyers yet the roughly 1.6 million homes in the nation's shadow inventory promise to drag down home prices for years,
In relative "hot spots" such as Texas, 1 out of 985 homes are in foreclosure, but in Florida 1 out of 368 and worse Nevada 1 out of 118 homes are in foreclosure. Even in not-so-glamorous, no flash and dash Midwest states such as Iowa, have 1 out of 667 homes in foreclosure (the national average historical number would be more like 1 out of 15,000 homes).
