Simple Math:
Amazingly Low Rates + Depressed Home Values + Vast Inventory = First Time Homebuyer Heaven
If you are a first time homebuyer in Metro Atlanta sitting on the sidelines, your amazing opportunity window may be shortening as the home market is poised to rebound. For months we have been proclaiming the dubious position that first time homebuyers are finding themselves in. We have been fortunate to work with more than a handful of first time homebuyers this year, and I'm always blown away at what is out there waiting for them.
Great Mortgage Interest Rates! I heard my dad and my father-in-law for the last few years tell me about how high rates were "back in the day" of the 1970's and 1980's. 10-12% interest rates were not only common, they were pretty darn good. We have really been spoiled here recently. In fact, rates dipped below 6% again this morning, and they appear to be going lower according to our friends at Countrywide Home Loans. If you are floating in the short term, waiting for interest rates to drop further, I encourage you to lock those rates. With the volatility we are seeing in all the financial markets, anything could happen. You may lose a little on your rate by locking, but you could also look like a hero on these sudden spikes we've seen in the last couple of weeks. Adjustable rate mortgages may be tempting, but with rates this low and if you can afford to do so, lock your rate for 30 years and forget about it. You'll be glad you did.
Home Values are Down! The Median YTD September 2008 sales price was down 10.3% versus the same period in 2007. Foreclosures represented over 23% of the overall sales in the 3rd Quarter. As mentioned before, you can't always consider a foreclosure a good "deal", but you sure have to look at them in this market. It's an equity cash grab if you find the right one. Sellers received 93% of their list price in the 3rd Quarter, which is 3.5% worse than the same time last year. The sellers are finally starting to accept the market, which is even further good news for the homebuyer.
Inventory is Still High! There is a 12.3 month home supply in the market right now, which is 20% higher than the same time last year. However, it's important to note that the home supply has dropped each of the last two months as this market attempts to correct itself. A 6 month supply of homes is a good balanced market to give you a point of reference.
Other great benefits in this market for first time homebuyers include the fact that 75% of all home sales included seller paid closing costs! FHA loans are available with 3% down, which can be in the form of a gift. The other good news is that we are entering the winter months when home sales typically slow down, making an offer even more attractive for a seller.
If you are considering buying a home for the first time or for the fiftieth time, there truly could be no better time than right now. We have received high praise from our clients for our consultative approach, making the homebuying process a simple and enjoyable experience. We would love to help you.
All statistics are cited from Chartmaster, 3rd Quarter 2008 Metro Atlanta Profile: Single Family Detached Residences. See www.thepeterscompany.com/blog for more posts.
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