Archive for October, 2007
Refinancing Your Home in Orange County, CA
To Schedule a showing for this property, please Click HerePosted: October 27th, 2007
Bart Smith’s
Real Estate Update
Fed Lowers Interest Rates….The Federal Reserve Board, in an action to demonstrate the government’s effort to prevent a recession, lowered interest rates by .5% on Sep. 18. This symbolic first drop in some time could help stabilize the considerable nervousness in financial markets. It is also hoped that it will encourage confidence in the home buying public, who has moved to the sidelines the past few months. That remains to be seen.
Will this mean lower mortgage rates?….The 30 year fixed rate mortgage, tied to 10 year Treasury Bonds (don’t ask) have pretty much anticipated a drop. Rates are about 6% right now. They will probably head slightly lower in the next year. Demand for loans is off by about 50% over a year ago, including purchases and refinances.
Housing prices continue to slide….Declines of about 10% over the past year in OC are pretty much across the board and have been even greater in some areas. Look for more of the same unless something causes buyers to re-surface. August saw about 1200 homes and condos sell while nearly 18,000 were on the market. If you do the math, that means that 92% of the homes on the market in August did not sell! We’re just not used to that slow of a market in So.Cal. (not since 1995).
If you’re a seller….Either price your home aggressively or take if off the market. Buyers have too many choices. They just won’t write offers on properties priced too high (in their opinion). And in this market, their opinion is what counts.
If you’re a buyer….What a great time to buy ! Be prepared…get pre-qualified, and do it through a direct lender. Remember, the people who have priced their homes aggressively are motivated to sell. Also remember that homes are still selling at nearly 97% of list price, so don’t expect a ridiculous offer to get results. If you want that kind of a bargain, go to a foreclosure sale with cash. That’s the only way to get huge discounts.
Speaking of foreclosures….Currently about 7% of properties for sale are short sales or bank owned properties. These should represent the lower end of a given price range. Sometimes they are physically distressed as well as financially distressed. Ask an expert (preferably me) to help you through the process of buying these properties. You can find bargains, but you need to understand the process. Right now I have over 20 of these properties in inventory. Feel free to call me to discuss the pros and cons of foreclosures.
Until next time,
Bart Smith