Happy New Year! Yes, interest rates on a 30-year fixed loan below $417,000 are now 1.3 points lower than they were 3 months ago, almost a point lower than a year ago, and are now hovering around 5%! Conforming jumbo loans (up to $650,500) are hovering a little above 5.5%.
At the risk of sounding over exuberant, this could be a once in a lifetime opportunity! Especially if you're interested in buying a first home, moving up or to a different neighborhood, or buying investment property. Now I can hear the "Ya buts" coming. Will the real estate prices go lower? If you live in Antioch, probably. If you live in the near East Bay, probably not. Here's why. Right now, there are bank owned houses priced below market that are getting bid up by $30,000 to $50,000 or more. On my listings of the last couple months, most have gotten multiple offers. Add to that, the new administration is definitely planning a stimulus package for housing. It would not surprise me to see some sort of moratorium or curtailment of foreclosures. Further, prices would have to fall another 10% to match the interest rate reduction.
So the time to step in is now. Before interest rates go up, and prices start to go up. You can buy great starter homes for around $200,000 now. You can get a house in a great neighborhood priced 25% below what is was 3-4 years ago. If you'd like to take advantage of the recovery, just call me in my office: 510-273-9318. In any case, it's always good to hear from you...or any of your neighbors, friends or co-workers!
