2009 Mortgages Have Found Their “Sweet Spot”!
May 28, 2009 by Jim Walberg · 2 Comments
Jim Walberg is in the residential real estate trenches everyday. For the last few months a “sweet spot” has shown up as the hottest price point in the East Bay housing markets – $729,000 and below!
Remembering that all real estate is “local”, the experience we are having in our San Francisco Bay Area real estate markets is close to a “feeding frenzy” when it comes homes selling in the $725,000 price point and below. In fact, real estate is not just local, it is made up of dozens of “micro-markets” within miles of each other. Yesterday, KCBS 740 AM radio did a feature on this very topic and even asked me to comment about it as a Realtor who has been serving this region for over 30 years.
In the East Bay these “micro-markets” are almost 100% based on the price point of $725,000 and below. The words I would use today is, this slice of the residential real estate market is ON FIRE! These “micro-markets” are not just made up of REOs and Short Sales, they are mostly homes that are gorgeous, and in turnkey condition.
We listed a home for sale in the East Bay two weeks ago for around $675,000. It was the former model home in a beautiful community. It was staged perfectly and in move-in condition. Within two days we had six purchase offers presented to us, and it was in escrow within four days – closed in 25 days! Now that is HOT! Because of these results in our communities, you are seeing a trend that is creating a lack of inventory for Buyers to chose from. Months of inventor in some of these communities are as low as ONE MONTH! And when you look at the East Bay communities with price points over $1 million, they have 10 to 20 months of inventory of homes to sell. Do you see the dramatic difference in what price point can have on a community?
There are many factors that come into play that create this type of Buyer and Seller experience. So, this may not be what is happening in other regions of the country, but it is happening in the East Bay. Some of those key factors related to this price point are; mortgage rates are incredible; FHA, VA, Fanny Mae, and Freddy Mac loans allow for as little as 3.5% down for qualified Buyers; a GREAT community to live and work in; and GREAT schools. These are some of the key ingredients required for HOT MARKET conditions.
One of these key factors will not continue for much longer – attractive mortgage interest rates. They just had a dramatic increase the last few days. And…you can quote me on it, “Mortgage interest rates in the $725,000 and below price points will go UP by the end of year – maybe as high as 7%!” My reason for making this prediction is inflation, our country’s debt, bond prices, and foreign countries not buying the U.S. debt vehicles.
The message to Buyers??? If you are thinking of Buying a home in 2009 contact your real estate professional, and your mortgage loan officer TODAY, lock your loan, and see if you can get into the residential real estate market at one of the best times in our economic history. Please contact me today if you have questions or need any assistance in finding your next home. Until next time…your Bay Area lifestyle detective remains on duty!
Related posts:
Jim,
Great artice. I can’t believe that rates move up so fast yesterday. I know that they will be going up to pay for our debt but never thought so quickly.
Take care.