Since we all hear divergent and confusing opinions and anecdotes about the real estate market, we want to share some facts to support the growing consensus that we are turning the corner in this resort area of California. The arguments that we are a second home market and that unemployment remains worrisome are valid to a point. Remember the falacious argument that lack of industry other than Hospitality would constrain growth? The overarching fact is that eyepopping value relative to recent history, and especially compared to other cities, is motivating prudent buyers to avail themselves of an unusual opportunity. The fence sitters will make a mistake procrastinating. Afterall, the wise buyer knows that the bottom of the market is only confirmed in the rear view mirror after it’s a thing of the past. Rather than speculate as to whether we’ve hit bottom, savvy buyers make offers and negotiate.
Following our post of yesterday, here’s some empirical evidence (not opinion) that the Palm Springs California real estate market is rebounding. This post will resonate importantly when you CLICK ON THIS LINK to first review these easily digestable charts. Please do yourself a favor and check them out before you continue reading.
Motivated Sellers and Inventory
Now is an ideal time to buy, in most markets prices won’t go any lower
and there is an abundance of inventory. Inventory of homes for
sale is at a 15-year high. There are many options out there for
many buyers and many sellers who are willing to negotiate and work
towards a win-win situation that works for both parties.
The Market is Getting Stronger and
Every Market is Different
Remember that all real estate is local and that all markets are
different. There are opportunities out there for a buyer if you’re
willing to look. The Homebuyer Tax Credit contained in the Housing
and Economic Recovery Act of 2008 was updated in the American
Recovery and Reinvestment Act of 2009. For 2009 purchasers
the credit is $8000 and does not need to be repaid. The credit is
available through December 1, 2009, meaning qualified buyers
only have a short window of opportunity to take advantage of this
special program.
A modest recovery for existing-home sales is expected
in 2009. Pent-up demand, coupled with an abundance of safer
mortgage products, will lead to near-term market improvements.
The Emergency Economic Stability Act enacted on October 3, 2008
will help to improve credit markets and allow housing to lead the
economic recovery.
FHA Loans Set to Increase
There are many choices for buyers looking for mortgages in this
market. One option, FHA home loans, are a viable alternative for
many first time buyers. The Federal Housing Administration (FHA)
— which is part of HUD — insures the loan, so your lender can
offer you a better deal, offering low down payments, low closing
costs, and easy credit qualifying. FHA market share for home
purchases is expected to rise significantly over the next 3 years, from
an estimated 4% in 2007 to an estimated 35% in 2009. Let us know if we can introduce you to our mortgage experts about FHA and other loans.
Benefits of Ownership
Owning a home is the American dream. It not only provides amazing
tax benefits but it also provides shelter and security to families. You probably know that:
— Dollar for dollar, the rate of return on an individual’s cash
down payment on a house is substantial? And that repeat
buyers are able to put 19% more down on a new home due
to appreciation?
— Home owners move less often and are more likely to vote
and volunteer time for political and charitable causes than
renters?
— When you own a home you can deduct the property taxes and
mortgage interest from your income taxes?
— The gains that you make on a primary residence that you’ve
occupied for two years out of 5 can be tax free?
Some More Housing Market Facts:
Mortgages are at Historically Low Rates
For buyers who qualify, mortgage rates are near historical
lows. Rates are well under 6%, with many closer to 5% than 6%. According to data provided
by Freddie Mac, rates averaged 9.2% in the past 30 years.
In addition, low interest rates, coupled with recent corrections, give people
looking to upgrade a unique opportunity to take advantage of
market conditions.
The Value of Your Investment
Despite some contrary media reports and some moderate losses in
value in the short-term, home values long-term have and
will continue to rise. Real estate is a long-term investment.
Home values could fall in some years, though, on average over the
past 30 years, the median price of existing homes has increased
more than 6 percent every year. Thanks to the power of leverage,
a homeowner’s return on investment is even more impressive over
time. IT IS A GREAT TO BUY!
