East Bay Real Estate – A Great Time To Buy – NOW!

March 10, 2008 by Jim Walberg · Leave a Comment

If a Buyer has the money, they are crazy not to buy NOW!

So, my earlier blog posting about Sellers need to become Buyers as soon as possible is even more credible today than ever! This is a Buyers Market in East Bay Real Estate! It doesn’t matter if the Buyer is an investor looking at the bargains in East Contra and Alameda Counties, or if they are looking for a price appropriate home in the Pleasanton to Orinda corridor, NOW is the time to act. However, today’s Buyers need to have the money for a 20% downpayment. If you have the money you are going to get a great deal! “Lenders aren’t cutting everone off. They’re reverting to sanity after yers of making bad loans,” says Dick Lepre, senior loan officer at Residential Pacific Mortgage, in San Francisco.

Today’s Wall Street Journal stated, “If you are about to get into the housing market, this is all good news. But before you begin visiting open houses, recognize that the old home-buying rules no longer apply in March 2008. You want to approach buying your first house with a financially realistice point of view.” Buyers need to remember that they are buying a home to live in, not speculating in the stock market or even putting money into a savings account. So, keep it simple stupid is the place to start. Buy smart. Get the best price and terms possible.

There are five steps that today’s Buyer needs to take;

Determine what you can afford! Lenders have tightened their standards and are requiring more of a downpayment. The lender guidelines are that they do not want a borrower to spend more than 28% of their gross monthly income on a mortgage payment, property taxes and insurance. Also, be sure you have cash for closing costs – somewhere around 2% TO 3% of the purchase price. In addition, factor in moving costs and the home’s maintenance.
Know your local market! Location, location, location is still a key to purchasing your home. Don’t forget great schools, the expansion of new home developments, public works projects, etc. Remember, 80+% of home prices are what is happening in the local economies – job growth, neighborhood conditions, and quality of life.
Look for values, but don’t pass on a home to meets your needs! As you consult with your local real estate professional she/he will provide you the local information regarding what the typical price correction has been in the community you are considering. You may find in the East Bay real estate markets that prices vary from what they were in 2004 to 2006. Make every dollar count in your purchse.
Don’t be afraid to negotiate – take your time! We have found while representing our Buyers, that many of the homes for sale are represented by Realtors that are still not dealing with reality regarding comparable sales. During the negotiating process, you may want to check out how much it would cost you to rent a home after totalling up monthly mortgage payments, property taxes and insurance. If you can rent the same home for virtually the same price it would cost you on a monthly basis to purchase a similar home, the Seller may be asking too much for the home.
Always buy for the long term! Your home is not meant to be purchased on speculation of rising prices! In a downward market, people should purchase a home only if they intend to live there for five to ten years. If you are not planning on staying in your home for awhile, then you may want to watch from a rental. From past history, housing bubbles take a couple of years to deflate. You may have a different opinion, but I truly believe that we are close the bottom of the price corrections in the Pleasanton to Orinda house markets. There still may be more price corrections in East Counties where the majority of the 100% financing occured.

So, you have now read my opinion about why Buyers need to act now! One other factor to throw into the mix is that mortgage rates are still at 20 year lows, and the adjustments that Congress just passed for Jumbo loans allows for East Bay real estate Buyers to benefit from the increase to $729,000 for Jumbo rates! This is a much BIGGER deal than the “economic stimulas package” that President Bush is trying to sell as the solution for solving the issues of the U.S. economy. Don’t hold your breath that printing more money will be the solution. Until next time….