While today’s market looks drastically different from how it was during its peak a few years ago. Today’s market shows many signs that it is a great time to buy. With foreclosures and short sales driving prices of properties down it makes purchasing a real estate very affordable. Current interest rates are near record lows help shrinking mortgage premiums for buyers. Even with the influx of distressed properties into the market there are many signs that point to price stabilization in the near future.
Recent home prices are very low compared to the prices that it was at a few years ago. According to Moody’s analytics the ratio of home prices to household incomes have dropped 20.9 % from the fifteen year average. Affordability of homes have dropped significantly making home buying much easier than before. The number of distressed properties in the market it has lowered the prices of houses lower.
The current interest rate as of June 24th, 2011 according to Yahoo Real estate is 3.944% for a fifteen year fixed mortgage and 4.699% for a 30 year fixed mortgage. Both interest rates are near 50 year lows. According to NSDCAR’s Homedex in May 2011 the median price of a home in North San Diego County was $380,000. That means with a 30 year fixed mortgage at 4.55% apr and 20% down payment the approximate monthly payment would be $1500. To put this in perspective $380,000 can fetch a 2500 square foot - 4 bedroom 3 bathroom house in San Marcos, CA, which can rent for approximately $2700 per month.
There are many signs that point towards its stabilization and rise, even with the current shape that real estate market is in. Moody’s Analytics predicts that the number of distressed sales by the fall by the end of 2013. Diminishing numbers in distressed properties will lead to stable home prices. Moody’s Analytics also shows that the average price of homes decreased only 0.7% this past year if distressed properties are not taken into account. A very promising indication of what the market could look like without distressed properties in the housing market. In recent years the home development market has become very stagnant and this trend will continue. This will only help stabilize home prices by limiting the inventory of properties in the market. The diminishing number of distressed sales as well as a decrease in new homes entering the market, point to a more stable market and higher home prices in the near future.
There are many perks in owning a home versus renting an apartment or house. As a homebuyer you are able to file for tax deductions on the interest that is paid on your mortgage. Homeowners can also benefit from tax deductions on annual payments on property taxes. Owning your own home means you have the freedom to upgrade and customize your home without permission of a landlord. The mortgage payments will help build equity on the property while paying rent will only lead to building the landlords’ equity.
Diminishing numbers of new homes entering the market, decreased distressed sales, record low interest rates, and very affordable home prices now is the time to buy.
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This entry was posted on Thursday, July 7th, 2011 at 5:49 am and is filed under News. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.