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How do we create a Window of Opportunity for Buyers to Buy?

By Carlos Arvizu

Real Estate Broker/Owner with Carlos R. Arvizu Sr. with Prudential California Realy

November 23, 2007 12:51 PM

Buyers Buy, when buyers Buy.

At this moment in time, most buyers are confused with the buying at this time, mostly of misinformation, and media hype..... All of them want to wait, for a perceived bottomming of the real estate market, so they can get a good deal. Question is When?

Being in this business, since Moses was a child, I can earnestly say, that most buyers don't have a clue when to buy. They think they know, but most don't.

Most millionairs have real estate holdings, why? Because for the most part, there is certainty that it will go up over time.

I own stock, however, since the 1st of November, we've (my wife's 401K) have lost $45,000 just on uncertanties, thats about 10% of her retirement.... My Real Estate investments have far exceeded the $7 million dollars of of wealth building.

I can leverage it for cash flow, I can raise my rents for a pay raise, yes, I have an occastional plumbing bill or I may have to evict someone, that's worth the temporary headace, but at least for the most part I am in control. The Real Estate Market is more to my comfort zone.

Below is a good example why this is a great time to buy. Interest Rates are affordable, you can get a 6.25% or perhaps lower on a 30 year fixed rate, sellers are apt to give a concession if you're buyers buying a home.

I can remember owning a property in early 70, it was purchased for $23K

In my area of Southern California, here is a small snapshot of what real estate prices have been over the last 67 years; (Now, the real Question is, "Do you feel Lucky, P__").

No one can perdict the future, but most people (Buyers), need to get real, Now is the best time to buy! Don't listen to the Media Hype!

Properties Sold for; $1,500. in the 40's $5,000. in the 50's $10,000. in the 60's $20,000. in the early 70's $99,000. in the Late 70's $107,000. in the early 80's $196,000. in the Late 80's $$193,000. in the early 90's $217,000. in the late 90's $241,000. in the early 2000's $262,000. in 2001 $316,000. in 2002 $371,000. in 2003 $450,000. in 2004 $524,000. in 2005 $556,000. in 2006 and $588,000. as of September 2007

Good Luck, God Bless, Make it a Great Day.

Carlos R. Arvizu Sr. Pronounced R.V. Zoo

Prudential California Realty/The Mulhearn Group

562-755-3856

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Lori Lincoln And Associates

Top Agent Serving Dighton Taunton, Rehoboth and more! - Taunton, MA

Top Agent Taunton,Dighton Rehoboth &more

Well, today's market is all about price and the buyers know it.

I encourage my buyers to make an offer if they "fall in love" with the home.

Tellling them also, that price won't matter, if they are ready, willing and able today, the price will not matter 10 years from now unless they plan on selling sooner.

Nov 23, 2007 12:55 PM

Gary Bolen

McCall Realty - South Lake Tahoe, CA

CRS - Lake Tahoe Real Estate Information

Carols - this is the question of the moment, isn't it? Greanspan was quoted today as saying we're not close to bottom yet, though our numbers suggest we're probably very close to it. We do know this, there are excellent opportunities here right now, and a few of them.

hope you've had a good holiday

cheers

Nov 23, 2007 12:57 PM

MAGA MAGA

Arctic Bay, YN

Thanks Carlos that was informative and enlightning, my husband and i stick to what we know and it is NOT the stock market.

Nov 23, 2007 01:00 PM

Maryann Salt

Maryann Salt - Concord, CA

Money is cheap, and home prices are declining. As the mortgage industry gets better, early 1st quarter next year, although the real estate market isn't going to get much better, people will see that money is cheap, and it's a great time to buy. Although adjustable rate mortgages will peak in recasting next year 2008, foreclosures will continue, and prices will decline. Folks will see that they can move closer to work, and as rates continue to decline, money is cheap. I do agree that buyers will buy when they want to, and that sometimes can be annoying; however, I have been in the business long enough to know that the need will always be there. It's just a matter of knowing your market, as you clearly do.

Nov 23, 2007 01:00 PM

Carlos Arvizu

Carlos R. Arvizu Sr. with Prudential California Realy - Downey, CA

(R.V. Zoo)

November 24, 2007 Friday 2:45 pm

Dear Walter, My name is Carlos R. Arvizu Sr. I am a Realtor with Prudential California Realty in Pico Rivera, California. I am fully frustrated what the news media is doing to the homeowners of our nation, especially in my area. On November 14th, 2007, the Long Beach Press Telegram, a local newspaper that is circulated in the southeast Los Angeles County for the communities surrounding the Long Beach area, is a prime example of what I am writing about.

They took out of context, what Mr... Yum had said during the NAR National Conference in Las Vegas. Their Headlines read " HOME PRICES FALL FURTHER" in reading into the story, it reported that according to the National Association of Realtors, Economist Yum, had said that a modest recovery of home sales in 2008. There has to be an end to the madness of news manipulation, either by laws or at least an awareness of misconceived or a manipulation to distort information.

As a Realtor, in California, I could lose my Real Estate License, be fined and worst, be accused of steering, and frightening the public. The news media has a responsibility to report the news, but it also has a grave responsibility not to cause panic them. I was so furious, that I actually, picketed in front of the Long Beach Press Telegram, to Boycott this newspaper and it's advertisers. Of course I was ill prepared, because I was the only one out there, I did get a few honks from a few motorist, but because I didn't get the word out, it was mostly symbolic.

At NAR, you report all over the nation and have the financial resources to effectively report what's going on in the nation, most everyone, from consumers, the press, and politicians, grab for the headlines, that often, is confused with the local real estate market. Here is what I feel is happening across our nation, that is being manipulated by many news media outlets, such as; Newspapers, Radio, Television, Magazines and Now, the Internet.

Yes, we do have a credit crunch that is affecting a lot of people, including realtors and affiliated services, retailers, manufactures of related goods and services that provide for products or services for the real estate industry and consumers. Many of the problems are fixable, however, first we need to understand there were many contributing factors, and how all of them came to be.

California, has unique problems that many other states have and don't have. We have almost 38 million people who reside in the state, with many more moving into the state than leaving. We also have a growing immigration problem, along with being a high cost state for housing and also have 20% of the economy of the United State. The initial problems with the sub prime loans, to some extent is true, however, not everyone used 100% financing or stated income programs, so therefore not totally accurate.

Wall Street, provided easy mortgage money that helped fuel, an over heated real estate market by creating a money making opportunity for itself, while providing capital to fund many of these programs to home buyers.

Not everyone who bought a home utilized 100% financing. Approx. 70% of the buyers who bought, previously, owned their own home, which had sufficient equity. These buyers were Move up Buyers, or Seniors Down sizing, to accommodate life style changes..

Approx. 15% of properties were were purchased by Investment Buyers, who had no need for 100% financing, as they generally used proceeds from a IRS 1031 exchange. Approx. 3% to 5% of the properties that sold, used some type of government assistance or community block grants, that provided down payment assistances or bond programs, such as CHAFA, and FHA/VA guaranteed financing. So in reality, only 10 to 12% of the home buying public, used 100% financing.

Contrary to what is being reported in the media, 80% of those buyers who purchased a home, used 100% financing or some form of Stated Income programs, are doing o.k. That means, the 20% left, who used 100% financing (6%) are having difficulty.

What it boils down to is this, in my area of Los Angeles County, from Long Beach to Compton, from Whittier to the City of Los Angeles, approx. 23 Cities, we had last year (2006) 477,000 properties sold in California, we had 2700 people who lost their home to foreclosure. This year from January 1st., 2007 to October 1st., 2007, in those same cities, we had 12,600 Notices of Default (NOD's) which only accounted for approx. 2,957 homeowners that lost their home to the Trustee Sale. The majority of the people who used Sub prime loans, (100%) financing could not afford to buy in Los Angeles County, and therefore purchased homes in Riverside and San Bernadino Counties.

So what caused the credit crunch, and how do we fix it? Wall Street created it, But the Federal Reserve used it policy making tools at it disposal to help fuel the fire of the sub prime fall out. The Federal Reserve control two key interest rates to help fight inflation by controlling the money supply, these are the Discount Rate and the Fed Funds Rate.

In 2004, the Federal Reserve started it's quest to slow down the rate of Appreciation that was seen as too hot, and the economy was inflation bound, so by raising the Fed Funds Rate for 17 months consecutively, they succeeded in killing the housing market for most part. Of course, Wall Street got caught with their pants down, and many sub prime lenders closed their doors. There is more to the story, the defaults we're having is only part of the problem in this so called credit crunch. Many of these lenders who now hold these mortgages, are caught between a rock and a hardplace.

Until the Nation's Law makers concede in granting states like California, a high cost state, who's Median Price Home is $588,000, as of September 2007, make it very difficult for a lender to provide mortgage money to a borrower, as the maximum mortgage loan is set at $417,000 for a Conforming Loan, that can be purchased on the secondary mortgage market, by FannieMae or FreddieMac.

Consumer Confidence is at an all time low, the Feds have started to lower the fed funds rate on Sept. 18th and on October 31st, they were good moves, but not enough in my opinion, however it's a start. They are also cautious of the Dollar losing value against other currencies and inflation, with high cost crude oil reaching the $100. a barrel.

In Summation, What should we do? Encourage NAR to apply pressure to change the Conforming Loan Limits, so that lenders have the ability to move money to make loans, this help the real estate market eminsely. Call on all Realtors to boycott and Picket the News organizations to bring attention that our Real Estate Market is Local. We need to encourage buyers to buy. We need action, today, not hype. Please forward a copy of this E mail to Mr. Gregory and Mr. Yum. Thank you for your consideration.

Very truly yours, Carlos R. Arvizu Sr. Prudential California Realty/ The Mulhearn Group 562-755-3856 TheDon1950@aol.com http://www.carlosarvizu.com/

Nov 23, 2007 01:06 PM

Craig W. Barrett

RE/MAX 100 - Hughesville, MD

Hughesville MD Real Estate

Carlos said - Being in this business, since Moses was a child, - That's funny. I agree buyers are unsure and are fearful of the trepidation in the market. I know in my area it's a good time for move-up buyers.

Nov 23, 2007 01:15 PM

Lori Lincoln And Associates

Top Agent Serving Dighton Taunton, Rehoboth and more! - Taunton, MA

Top Agent Taunton,Dighton Rehoboth &more

Another thought, we as professionals also need to be careful not to "unsell" a home. I am primarily a listing agent.

Recently a buyer and buyer's agent viewed one of my listings. The buyer seemed 100% sold. The buyer's agent proceeded to remind the buyer about a statement made earlier in the showing,

This is the buyer's agent mind you.. she said " I thought you wanted 3 baths?". "What??????" UUGGHH!

Buyer's agents do need to look out for the buyers interest, but they are also salespeople and will not get paid until a sale is made.

If the buyer is 90% on their way to an offer...

Nov 23, 2007 01:34 PM

Michael Eisenberg

eXp Realty - Bellingham, WA

Bellingham Real Estate Guy

Amazing statistics, though markets are cyclical, they are clearly rising over the yeas

Nov 23, 2007 01:37 PM

Bob & Carolin Benjamin

Benjamin Realty LLC - Gold Canyon, AZ

East Phoenix Arizona Homes

Thanks for the good post. Appreciate it.

Nov 23, 2007 03:33 PM

Gita Bantwal

RE/MAX Centre Realtors - Warwick, PA

REALTOR,ABR,CRS,SRES,GRI - Bucks County & Philadel

Good post. There is usually a correction but like they say 'They don't make any more land" It will go up.

Nov 23, 2007 11:23 PM

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