If you are a buyer who has been sitting on the sidelines, the recent drop in mortgage rates may provide the incentive to pull the trigger. The 30 year fixed mortgage dipped to almost 4.45 this last week while the 15 year mortgage rate hit a new low of 3.52%. These low rates helped drive applications for refinances up almost 8% and new purchase application up approximately 5%.
Another incentive for buyers to act now is the fear that proposed new banking rules could raise the cost of lending which would be passed onto the borrower in the form of higher interest rates. These proposed qualified residential mortgage standards are currently being debated. For now, lower interest rates should help borrowers get lower monthly payments and lower their risk of default.
In prime Westside areas the approximately One Million Dollar market is catching competitive bidding from young couples looking to purchase their first home. Well priced properties in these areas are generating multiple offers. In other neighborhoods, the weak job market and the inability of many borrowers to meet lenders’ tight credit standards are hurting sales and putting downward pressure on prices. This
is not the case on the luxury Westside. Some buyers are hard working high income professionals, some are trust fund babies and others are getting help with down payments from affluent parents.
These young buyers are going back to the traditional “safe haven” view that their home will be a stable investment over the long term. They want to create a comfortable home for a growing family. They look forward to building equity and the tax benefits of writing off the interest on their home mortgage against their income.
Even if housing dips another 5% as some are forecasting through next year, these young enthusiastic buyers feel confident that with historic low interest rates, this is the right move.
The latest data through May 2011 from the S & P /Case Shiller Home Price Index, the leading measure of U.S. Home prices, showed prices up the last 2 consecutive months for the 10 and 20 city composite index. The increase was approximately 1%. Detroit, Las Vegas and Tampa were down month over month and Phoenix was unchanged. The Case/Shiller numbers for year over year sales showed prices down by 4.5%. However, real estate is a local neighborhood story so be sure to review the local comps for your neighborhood before you buy or sell.
To find short pays and foreclosures in your area or for a free consultation to assess your real estate options, contact Bess at 310.291.4111. Bess Hochman is a Real Estate Broker & top producer for more than 15 years. Bess is also distinguished by holding a law degree. Her high-end clientele include celebrities, attorneys, and other professionals that understand the value of a real estate broker with legal expertise and experience. A native of Beverly Hills, Bess credits her success to repeat referrals by her satisfied clients.
Bess won’t let you guess. E-mail: Bess.CenturyCitynews@yahoo.com. Bess may be reached at 310.291.4111.
c. 2011 Bess Hochman
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“Bess is a master negotiator!” says Michael Donaldson, attorney & author of Negotiating For Dummies
Michael Douglas Carlin is the director of the movies Luvicide and American Federale. Recently he completed a ten-year stint as the Publisher and Editor of the Century City News. Here his articles turned into three books: Rise a Knight, A Prescription for Peace, and Peaceful Protests.
