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THINKING POINTS FOR HOME BUYERS:
This May be the Best Time to Buy a Home in 35 Years!
* In April of 1973, mortgage rates were about the same as they are today. Since that time, we have only had mortgage rates this low during 2001 and 2002, the height of the seller's markets where there was little inventory. In the last two major buyer's markets, one in the early 1980s and the other in the early 1990s, the rates were much higher. When I started in the business in 1978, interest rates were at 9.75 percent, en route to 18 to 21 percent in 1980. In the early 1990s, the rates were hovering in the 11 to 12 percent range. Thus, today's buyer's market, with exceptionally low mortgage rates plus a substantial supply of inventory, is the best time in decades to purchase.
* There is a cost to first-time buyers the cost of waiting. There are several different ways that first time buyers lose money by waiting to purchase. The first is loss of tax deductions. In most cases, people who lack a mortgage pay more federal and state income taxes than those who qualify for a mortgage deduction. You can use a mortgage calculator to illustrate this point. For example, assume that a buyer is currently paying $1,500 per month on a rental. If the buyer purchases a $300,000 property with $30,000 down and a fixed-rate 30-year mortgage of $270,000 at 6.25 percent, the buyer actually nets $24,262 more, assuming that appreciation keeps pace with inflation, the buyer owns the property for eight years, and is in the 28 percent bracket.
* Another way renters lose money is through wealth accumulation, generally in the form of creating equity by paying down the loan and through appreciation. According to the Federal Reserve, the average homeowner between 1995 and 2004 had a net worth of $184,400, of which approximately $60,000 was due to home ownership appreciation. To account for the difference of $60,000 of wealth accumulation, a $200,000 house would have to decline by 30 percent. Thus, each year a buyer waits to purchase a median-priced home, they lose $6,000 in potential wealth accumulation.
* An additional way that renters lose money is through increased interest rates. For example, on a $200,000 mortgage, assume that interest rates increase from six to seven percent. By waiting, the buyer's payments increase by $1,578 each year causing a total loss (in payments and wealth accumulation) of $7,578. If interest rates increase from six to eight percent on that same loan, they will pay an extra $3,221 per year resulting in a total loss of $9,221.
* Buyers in California usually shop commission-free.
* The doom and gloom buyers are hearing repeatedly about in the mass media should not affect their decision to act if they are ready, willing and able to invest in real estate now..
* Prices may still go lower, but as soon as they hit bottom, they will rebound aggressively, quickly wiping out any advantage buyers might have gained by waiting and trying to time the market perfectly, which usually simply cannot be done, even by so-called "experts."
* Right now, buyers have an unusually wide selection of properties to choose from, including those owned by people highly motivated to sell immediately.
* Financing is still available at historically low interest rate, yet it is still challenging to qualify for today's fixed rate mortgages. So qualified buyers face less competition for the better mortgages and interest rates now.
* So when you are ready, willing, able and eager to make a move, the time for action is now!
* Questions? Call me - I'm only a phone call phone away at 323-8899 or toll-free direct to my cell (800) 501-8501.
Vicki Taylor, Realtor
Cell: (209) 323-8899
Vicki Taylor, Prudential California Realtor
www.MovinCA.com !
Have Mobile Real Estate Office, Will Travel!
Just a Cell Phone Away: (209) 323-8899
Toll Free Direct to my Cell: (800) 501-8501
Taylor your real estate plans with Prudential!
Updated 4/21/08
* Some statistics and information in this article courtesy the Inman News, April 2008.
I handle Real Estate, Foreclosure Tours, Stockton homes, Stockton CA homes, Manteca Homes, Manteca CA Homes, Lodi Homes, Lodi CA Homes, Lathrop Homes, Lathrop CA Homes, Brentwood Homes, Brentwood CA Homes, Linden Homes, Linden CA Homes, Buyers' Market, Property California Foreclosed Real Estate, California Foreclosures, Foreclosures in California, University town, University of the Pacific, UOP, College town, college area, college neighborhood, university area, university neighborhood, Distress Sale, CalVet loans, FHA Loans, VA loans, military veterans, bargain real estate, cheap homes, cheap houses, Forclosures, Free Foreclosure Lists, Forclosures in California, Costco Cash Incentives, short sale, cheap houses, cheap homes, Pennysaver, Costco Cash Rebates, Real Estate For Sale in Central Valley, Central Valley Real Estate For Sale, Central Valley real estate, Central Valley foreclosures, New homes in Central Valley, Homes for Sale in Central Valley, Central Valley new homes, Central Valley Homes For Sale, Central Valley homes, Houses For Sale in Central Valley, Central Valley Houses for Sale, Central Valley houses, Real Estate Auction, For Sale Homes in San Joaquin County, San Joaquin County Homes for Sale, Houses for Sale in San Joaquin County, San Joaquin County Houses for Sale, Vicki Dee Taylor, Real Estate for Sale in Stockton, Lodi real estate, Manteca real estate, Ripon real estate, Stockton real estate, Lending Tree, Lodi foreclosures, Manteca foreclosures, Modesto Foreclosures, Ripon foreclosures, Stockton foreclosures, Auction, New homes in Lodi, For Sale Homes in Lodi, New homes in Manteca, For Sale Homes in Manteca, New Homes in Modesto, New homes in Ripon, New homes in Stockton, Homes For Sale in Stockton, Lodi new homes, Lodi Homes For Sale, Manteca new homes, Manteca Homes For Sale, Modesto Homes, Modesto New Homes, Ripon new homes, California Forclosed Real Estate, California Foreclosed Real Estate, Investment properties, residential investment, rental properties, triplex, duplex, fourplex, apartment, residential investments, investor's properties, investors, Costco Cash Incentives, Costco Cash Rebates, Real Estate For Sale in Central Valley, Central Valley Real Estate For Sale, Central Valley real estate, Central Valley foreclosures, New homes in Central Valley, Homes for Sale in Central Valley, Central Valley new homes, Central Valley Homes For Sale, Central Valley homes, Houses For Sale in Central Valley, Central Valley Houses for Sale, Central Valley houses, For Sale Homes in San Joaquin County, San Joaquin County Homes for Sale, Houses for Sale in San Joaquin County, San Joaquin County Houses for Sale, Vicki Dee Taylor, Real Estate for Sale in Stockton, Stockton MLS, Manteca MLS, Lodi MLS, Central Valley MLS, MLS in Stockton, MLS in Manteca, MLS in Lodi, Real Estate in Stockton, Real Estate in Lodi, Real Estate in Manteca, Real Estate in Central Valley, Lodi real estate, Manteca real estate, Ripon real estate, Stockton real estate, Lodi foreclosures, Manteca foreclosures, Modesto Foreclosures, Ripon foreclosures, Stockton foreclosures, New homes in Lodi, For Sale Homes in Lodi, New homes in Manteca, For Sale Homes in Manteca, New Homes in Modesto, New homes in Ripon, New homes in Stockton, Homes For Sale in Stockton, Lodi homes, Lodi new homes, Lodi Homes For Sale, Manteca new homes, Manteca Homes For Sale, Modesto Homes, Modesto New Homes, Ripon new homes , Manteca FSBO, Manteca For Sale By Owner, For Sale by Owner Manteca, FSBO Manteca, Stockton FSBO, Stockton For Sale by Owner, For Sale by Owner Stockton, FSBO Stockton, Lodi FSBO, Lodi For Sale by Owner, For Sale by Owner Lodi, FSBO Lodi, any and all homes in our market, new homes or existing homes, Beautiful Homes Stockton, Classic Homes in Stockton, Existing Homes in Stockton, Beautiful Homes in Lodi, Classic Homes in Lodi, Existing Homes in Lodi, Beautiful Homes, Classic Homes in Manteca, Existing Homes in Manteca, Beautiful Homes in the Central Valley, Classic Homes in the Central Valley, Existing Homes in the Central Valley, and provide Information on How to prevent Foreclosures, Foreclosure Prevention, Foreclosure Help, and Forclosure Help. Buying or Selling a home anywhere in CA or in California's Central Valley? I can help you!
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