Have you ever found yourself saying, “I wish I would have bought real estate in 1993, just before the market started to recover.” If I had a dollar for everyone who has made that comment to me over the years, I would be smiling all the way to the bank. Instead, I hear the regret and consequence of not acting on such great opportunities.
2011 is offering us the opportunity once again. In my 30 years in the real estate business, only a few times have the stars aligned to make buying real estate as an investment so potentially profitable. Let me give you some facts to support my opinion:
1) Interest rates are artificially low and a 30 year, 20% down mortgage is still available to investors at a rate below 5%!
2) Until September of this year, a borrower can obtain a loan up to $697,500, with as little as 3.5% down on an owner occupied property and 20% for non-owner occupied (This is called a conforming loan). After September of 2011, this loan amount will be considered a jumbo loan and the interest rate, credit score requirement and percentage of down payment will all increase.
3) Prices have dropped to record levels going back almost 10 years.
4) Construction of new homes has come to a near stand still since 2006. Yet, the need for housing has not slowed down. This deficiency in supply will create a demand in the not so far away future making both rental fees and real estate values increase dramatically, especially in the lower end of pricing.
5) Are we at the bottom of the market? Probably, but does it really matter? It may drop another 5%, but if interest rates increase even one half of a percent, then your payment will be higher than if you purchased before the inevitable climb of current interest rates.
6) The pendulum is already starting to swing. Many properties are currently being grabbed up by investors. Buyers who have been waiting to purchase for years are getting off the fence and starting to buy. Last year, my sellers that sold, averaged 16 days on the market and a list to sell ratio of 99.25%. This doesn’t sound like a lingering buyer’s market to me. The good homes are being purchased quickly and at or above list price. However, list price is still way below the value the home was 6 or 7 years ago.
I’m here to take care of all your real estate needs. Whether it’s selling, buying, taking care of your referrals, or simply wanting more information about today’s market, I’m only a phone call away: 760-681-6081.
It’s a good life and a good time to buy real estate.
Patty Keck
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