In our May 19 blog, we began look at our current market conditions, spearating rumor from fact. Let's continue the discussion...
As a Buyer… Contrary to what you may have heard, this is the time to buy!!! Interest rates (which I will discuss more in a later blog)are at close to HISTORIC lows. Last month we were seeing refi’s (which I will ALSO discuss later) on a 30 year loan and on home purchases still around the 5% mark. This is the close to lowest they have been in my 15 year real estate career.
All of this means your purchasing dollar goes farther. For example, in 2001, the average rates we were seeing on a 30 year mortgage were at 7%. So let’s say that I had a client buying a house back then for $150,000. Their monthly payment would have been $997.95. Today, buying that SAME house at that SAME price, their approximate payment would be $760.03. That is a monthly savings of $237!!! You are certainly getting more bang for your buck today!
Additionally, housing prices in the Valley are lower than they have been in 4 years. It has been my experience these last few months that in general houses are selling for what they would have sold for back in 2004. This is a far cry from what they would have sold for back in May of 2007 when we were hitting our value peak here in the Valley.
So if you look at both the combination of interest rates, lower prices, and the amount of inventory to choose from, you see that we have created a “perfect storm” in which to buy a home!
Add to this that if some of you are interested in being a first time home buyer, the government is offering some big tax incentives right now. I want you to write down this link if you are a first time home buyer: http://www.federalhousingtaxcredit.com/. According to this site, a tax credit of up to $8,000 is now available for qualified first-time home buyers purchasing a principal residence on or after January 1, 2009 and before December 1, 2009. Unlike the tax credit enacted in 2008, the new credit does not have to be repaid. This is amazing news!
So we see that the FACTS are telling us that it is a great time to buy, even if the news is telling us it is the time to fear.
In my next post, I will focus on the other side of the coin: What a seller should know in our current market.
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