There are many indicators of the Real Estate Market. Everyday I get asked: do you think we have hit the bottom? What do you think will be the bottom if this is not the bottom?
Should I buy now or wait to see if they get better?
Well if I had a crystal ball, I would be retired now and traveling the world. My whole family would be wealthy beyond belief and I would be happy to give you the benefit of my answers from my crystal ball.
However, all we can do is look at the indicators. Some tells of the woes of more short sales, more bank foreclosures, more price drops, higher unemployment, higher interest rates; and yet others show us the the medium home prices are increasing 14% over last year, new home builders in Irvine are raising prices 6-7% and prices are great because they are 45% below the high of Feb 2005 top. Fullerton economists say prices will increase around 5% and greater after 2012.
There are different markets in different areas. Irvine in unique because it has a low crime rate (highly advertised), one of the best schools in the Nation, and a lot of walking trails and parks planned through out. Beach cities have better temperatures, walking distance to the Ocean, some views, etc. Areas like Riverside were over built because of the promise of a dream home for reasonable prices, which were inflated because they could be and still be cheap.
Homes below $1 million are going fairly quickly, homes over are taking 1-3 years to sell unless priced well. The "Tides" by Standard Pacific development in Newport Coast just went back on the market at great prices and are selling in the $6 million range; priced well.
In the HOT market of wild increases and over biding, people were being greedy buying to flip homes, with no upgrades, and with loans on stated income; which means you really didn't have the income to qualify for the loan. They also got negative amortization loans which means you banked on the increases of the value so you paid minimal payments of maybe 1% interest and the remaining owed went back on the loan to increase the principle (you owed more than you paid but you didn't care because you were going to make a killing quickly.
On the average, most homes are increasing in miniscule amounts but still increasing. Interest rates are still very low and if you plan on buying and living in your home for 10 years, it is well worth it to buy down your rate with points to make your payments comfortable. But to get back to the question of "Are we at the bottom of the market or have we hit the bottom" the answer is NOW is a good time to buy. If we are not there we are very very close, and those who buy now, it appears, will not get hurt. Buy your home, the palace you want to live in and couldn't afford. Get a great rate and make it comfortable to pay. Do your upgrades so that you enjoy it, not to get more money out of it later. If and when you sell, sell with the thought that you saved tax money that you normally would have paid Uncle Sam because you didn't have any deductions; you got to enjoy and raise your children in the environment you chose, and you most likely will get your purchase price back out of your home, maybe more.
Why rent. Buy now, contact us
www.NewportCoastRealEstateTeam.com
Marlene Dietrich, Tony and Mike
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