Interest rates over the last week have been L-O-W! We are talking the lowest in about 3 years.
One client building a new home locked in his interest rate at 4.5% for a 30 year fixed rate. This happened on January 22, 2008, the morning after the 3/4% cut by the Federal Reserve. Rates did rise later that day, but 5.5% or less has continued to be available.
It is time to buy a house! What are you waiting for, a rate increase?
Thursday, January 31, 2008
Friday, January 18, 2008
Market Report - Time to buy!
If you have been waiting for the "bottom of the buyer's market" so you could get the best deal, you may be limiting the future success of your investment. Right now, real estate prices are the lowest they have been in years and we may already be at the bottom of this current cycle.
"Timing is everything" is one of those old sayings we live by, but recognizing the right time to buy is not an easy task. If you are waiting to buy a home for your family, waiting means continuing to pay rent, rent which pays you no return. The sooner you buy, the sooner you begin to build equity.
Today's mortgage interest rates are very low, too low to dismiss. You must give consideration to buying while the current rates are available. Think about this on a $150,000 mortgage at 6.5% you will pay $948 per month for principal and interest. If you wait, hoping to save $5000 and get the same house with a $145,000 mortgage you might be successful. However, if the interest rate goes to 7% (a 1/2% increase) while you are waiting, your payment will be $966 on the same 30 year mortgage. You saved $5000 up front, but have a higher house payment? You will be paying $18 more per month, that comes to $6480 additional over the life of the loan. Maybe not too big a gamble, but...
Another consideration is that if now is the bottom of the market and you have to pay $5000 more for that house later and the interest rate is 7%, your costs will be a lot higher. A $155,000 mortgage at 7% has a monthly payment of $1032.30 or $84.30 per month more than our first example. That is $30,348 more you would pay over the life of a 30 year loan. I can think of a lot I could do with an extra $30,000 - can't you?
If you want to know the facts and "just the facts" about the housing market? Here is a link that you might enjoy. This site is sponsored by the National Association of Realtors®: http://www.housingmarketfacts.com/. Enjoy your visit there, but don't forget to return to this blog and read more articles written over the last few months about the current market.
When you are ready, my team of professional Realtors® would love to help you find your next home. If that means helping you sell a current home, we can help with that as well. You can find out all about us at UpwardRealty.com.
Copyright 2008
"Timing is everything" is one of those old sayings we live by, but recognizing the right time to buy is not an easy task. If you are waiting to buy a home for your family, waiting means continuing to pay rent, rent which pays you no return. The sooner you buy, the sooner you begin to build equity.
Today's mortgage interest rates are very low, too low to dismiss. You must give consideration to buying while the current rates are available. Think about this on a $150,000 mortgage at 6.5% you will pay $948 per month for principal and interest. If you wait, hoping to save $5000 and get the same house with a $145,000 mortgage you might be successful. However, if the interest rate goes to 7% (a 1/2% increase) while you are waiting, your payment will be $966 on the same 30 year mortgage. You saved $5000 up front, but have a higher house payment? You will be paying $18 more per month, that comes to $6480 additional over the life of the loan. Maybe not too big a gamble, but...
Another consideration is that if now is the bottom of the market and you have to pay $5000 more for that house later and the interest rate is 7%, your costs will be a lot higher. A $155,000 mortgage at 7% has a monthly payment of $1032.30 or $84.30 per month more than our first example. That is $30,348 more you would pay over the life of a 30 year loan. I can think of a lot I could do with an extra $30,000 - can't you?
If you want to know the facts and "just the facts" about the housing market? Here is a link that you might enjoy. This site is sponsored by the National Association of Realtors®: http://www.housingmarketfacts.com/. Enjoy your visit there, but don't forget to return to this blog and read more articles written over the last few months about the current market.
When you are ready, my team of professional Realtors® would love to help you find your next home. If that means helping you sell a current home, we can help with that as well. You can find out all about us at UpwardRealty.com.
Copyright 2008
Monday, November 26, 2007
2007 a Boom Year for Real Estate?
You have read what I have to say about the current real estate market. Want to know what other "real estate experts" are saying?
Many people are listening to the news media and thinking they are getting "expert" advice. Friends and neighbors, that ain't necessarily so. Most of your network financial gurus are stock market guys. They want you to put your money with them in the stock market and not in real estate. They have been sulking over the last few years because people were buying real estate with the money their stock brokers used to "invest" for them. (But seriously, they deserved to lose you after they sold you all those .com stocks and messed up your 401k plans.)
Click on the link below and see what a real "real estate expert" has to say. While you are there, you can read other stories about the current real estate market, but don't forget to come back to my blog when you are done with this research project.
http://realtytimes.com/rtpages/20071126_buyinghomes.htm
You are welcome to leave your own real estate comments by clicking on the link below.
Many people are listening to the news media and thinking they are getting "expert" advice. Friends and neighbors, that ain't necessarily so. Most of your network financial gurus are stock market guys. They want you to put your money with them in the stock market and not in real estate. They have been sulking over the last few years because people were buying real estate with the money their stock brokers used to "invest" for them. (But seriously, they deserved to lose you after they sold you all those .com stocks and messed up your 401k plans.)
Click on the link below and see what a real "real estate expert" has to say. While you are there, you can read other stories about the current real estate market, but don't forget to come back to my blog when you are done with this research project.
http://realtytimes.com/rtpages/20071126_buyinghomes.htm
You are welcome to leave your own real estate comments by clicking on the link below.
Tuesday, November 20, 2007
What mortgage problems?
I watch the news just like you and they keep talking about the mortgage problems. Yes, I understand that a lot of owners are losing houses to foreclosure, but a lot more are not. If you are making your payments each month, you are fine and no one is going to take your home.
The facts are that over 95% of mortgages in America are being paid every month on time and there is no threat to these homeowners. Of the less than 5% who are left, the majority of them are still making some kind of payment and their lenders are working with them. That leaves a very small number of people who have quit paying on their mortgages and are now or will be in the process of losing their home shortly.
Recent surveys of actual people (not news media or "financial experts") show that more than 75% of those who have bought in the last 12 months feel good about their new home and expect to be there for 7 years or more. Further, they feel that their home investment will be as good or better than an equal investment in the stock market. They are keeping their head and not panicking - contrary to what the talking heads are saying.
So, relax and don't worry about the real estate market. If you want to buy a house, you have no reason to wait. Mortgage rates are at near record low levels, regardless of any mortgage problems the media is talking about. And with all the talk about the mortgage market and the phantom housing bubble, the prices are quite reasonable. Further drops in prices are less likely than increases in price as the market comes out of the thaw... I personally am looking to buy any bargains I can Now, before you guys start buying again and the prices begin to rise.
It is time to buy and quit listening to the nay-sayers!
Happy Thanksgiving!
Copyright 2007
The facts are that over 95% of mortgages in America are being paid every month on time and there is no threat to these homeowners. Of the less than 5% who are left, the majority of them are still making some kind of payment and their lenders are working with them. That leaves a very small number of people who have quit paying on their mortgages and are now or will be in the process of losing their home shortly.
Recent surveys of actual people (not news media or "financial experts") show that more than 75% of those who have bought in the last 12 months feel good about their new home and expect to be there for 7 years or more. Further, they feel that their home investment will be as good or better than an equal investment in the stock market. They are keeping their head and not panicking - contrary to what the talking heads are saying.
So, relax and don't worry about the real estate market. If you want to buy a house, you have no reason to wait. Mortgage rates are at near record low levels, regardless of any mortgage problems the media is talking about. And with all the talk about the mortgage market and the phantom housing bubble, the prices are quite reasonable. Further drops in prices are less likely than increases in price as the market comes out of the thaw... I personally am looking to buy any bargains I can Now, before you guys start buying again and the prices begin to rise.
It is time to buy and quit listening to the nay-sayers!
Happy Thanksgiving!
Copyright 2007
Wednesday, November 7, 2007
Real Estate - The Current Market
I have written several times in this blog about the current market. People seem to think we are in a recession or homes are just not selling. That is not the case. Do you want to know what the real estate market is doing? The term that seems to fit best is a "correction" and even this correction is not taking place on a nationwide basis. Some parts of the country are up 8-10% in prices and sales for 2007.
Real estate is like politics, it is always local. In the Chattanooga, TN. market, it really does not matter what is taking place in the New York, Florida or California markets. Those markets were inflated as everyone already knows. In those markets, there had to come a slow down at some point. Now is that time. However, most of the Southeast United States (excluding parts of Florida) has never been overinflated. The prices in most of the Southeast are still below national averages. The Chattanooga area is one of the most affordable places to live in America.
The National Association of Realtors® (NAR) tells us that the final sales figures for 2007 should show sales of about 5.9 million existing homes. This is not a record, but is at the level recorded for 2002, the second year of our most recent housing boom. That means we are really still buying and selling at boom market levels. The figures for next year are predicted to be in the 6.2 million for number of existing home sales in America.
Currently, prices in the Chattanooga area are fairly stable. Sellers still want to sell their homes, so they can move up or down while the market is adjusting. That means buyers can take advantage of this "buyer's market" and maybe get the lowest prices they will ever see. Everyone (yes, even you) fully expects prices to again rise and probably very shortly as 2008 begins the thaw.
Realtors® are still bullish on our market, we work in the housing market everyday and we see the American Dream still being pursued and attained. Those who are buying now are stopping the rent cycle and beginning the homeownership/equity building phase of life. Those who buy now will be a step ahead of you, if your plan is to "wait this out."
Most folks will continue to pay housing costs in some form, either as rent or they will realize the American Dream. You know the economy goes through cycles and you know this current housing cycle will end. Are you going to act now and take advantage of a buyer's market or will you react later when everyone else is buying and it is again a seller's market?
In Chattanooga, TN. there is a great team of Realtors® ready to work with you to help you realize your dreams of the "white picket fence" (even if your version is quite different.) Dreams don't just go away! My team at UpwardRealty.com can and will help you realize your American Dreams.
Call us anytime at (423) 847-8001 or check out our company website at http://www.upwardrealty.com/ .
Our goal is to give you such good service, you will become our "client for life."
Copyright 2007
Real estate is like politics, it is always local. In the Chattanooga, TN. market, it really does not matter what is taking place in the New York, Florida or California markets. Those markets were inflated as everyone already knows. In those markets, there had to come a slow down at some point. Now is that time. However, most of the Southeast United States (excluding parts of Florida) has never been overinflated. The prices in most of the Southeast are still below national averages. The Chattanooga area is one of the most affordable places to live in America.
The National Association of Realtors® (NAR) tells us that the final sales figures for 2007 should show sales of about 5.9 million existing homes. This is not a record, but is at the level recorded for 2002, the second year of our most recent housing boom. That means we are really still buying and selling at boom market levels. The figures for next year are predicted to be in the 6.2 million for number of existing home sales in America.
Currently, prices in the Chattanooga area are fairly stable. Sellers still want to sell their homes, so they can move up or down while the market is adjusting. That means buyers can take advantage of this "buyer's market" and maybe get the lowest prices they will ever see. Everyone (yes, even you) fully expects prices to again rise and probably very shortly as 2008 begins the thaw.
Realtors® are still bullish on our market, we work in the housing market everyday and we see the American Dream still being pursued and attained. Those who are buying now are stopping the rent cycle and beginning the homeownership/equity building phase of life. Those who buy now will be a step ahead of you, if your plan is to "wait this out."
Most folks will continue to pay housing costs in some form, either as rent or they will realize the American Dream. You know the economy goes through cycles and you know this current housing cycle will end. Are you going to act now and take advantage of a buyer's market or will you react later when everyone else is buying and it is again a seller's market?
In Chattanooga, TN. there is a great team of Realtors® ready to work with you to help you realize your dreams of the "white picket fence" (even if your version is quite different.) Dreams don't just go away! My team at UpwardRealty.com can and will help you realize your American Dreams.
Call us anytime at (423) 847-8001 or check out our company website at http://www.upwardrealty.com/ .
Our goal is to give you such good service, you will become our "client for life."
Copyright 2007
Friday, November 2, 2007
Enough With the Gloom and Doom!
Do news reporters truly enjoy delivering only bad news? If you have listened to either the local or national news outlets recently, you probably think buying or owning a home is the worst thing you can consider. Regardless of the facts, the press is continuously telling us how the bottom is just falling out of our economy and buying a home now is just stupid.
Well, that ain't so! Most of the so called "experts" are not real estate experts. I have watched investment shows while four experts discuss which stocks they think are right to buy. All four have their favorites and each gives good reasons why the other three experts are really idiots. Then after 10 minutes of this, the moderator will ask them about real estate. All four will give the same response - it is a bad time to buy, prices will continue to drop, it is just bad-bad-bad! This is the only thing these "experts" have agreed on the whole time they have been on the program. However, when they were introduced, there was nothing said about them having any real estate experience - they all work for business magazines, websites, or stock brokerages. They all have an agenda - get your money out of real estate and into the stock they sell.
However, everyone keeps telling us it is a "buyer's market". Doesn't that mean it is a GOOD time to buy? Actually it does! Right now, because of the relentless bad press on real estate, prices have dropped. They have not dropped by double-digit amounts as the press whould lead to you think, but in most markets prices today are 3-5% below the level of a year ago. However, prices have actually gone up in some areas this year. Also, most home owners are not in a "have to" sell situation, so they will not make drastic price cuts, even with the "I'm going to steal a house" mentality many buyers now have.
If you are buying, expect to get a fair price, but not to steal a house. Sellers will just wait you out. Right now, you can buy a house at a reasonable price, but if you wait another year, you may be paying 8-10% or more to buy that same house. That's OK, the sellers are willing to wait.
How about interest rates on mortgages. The press has not been telling you that rates are really low. You can find 30 year fixed rate mortgages at around 6%, give or take a quarter. For 15 year terms, fixed rates are below 6%. Folks, those are LOW rates! Does anyone remember the early 80's - back then 15-18% was common and people went nuts when the rates dropped to the 11-13% range.
Regardless of what the press says, the economy is good right now. Interest rates are low, unemployment figures are low, the economic reports show the economy growing, and if not for rising gas prices we would say the economy is booming.
It is a good time to buy real estate, before the prices and interest rates begin to go back up. And you know they will.
Well, that ain't so! Most of the so called "experts" are not real estate experts. I have watched investment shows while four experts discuss which stocks they think are right to buy. All four have their favorites and each gives good reasons why the other three experts are really idiots. Then after 10 minutes of this, the moderator will ask them about real estate. All four will give the same response - it is a bad time to buy, prices will continue to drop, it is just bad-bad-bad! This is the only thing these "experts" have agreed on the whole time they have been on the program. However, when they were introduced, there was nothing said about them having any real estate experience - they all work for business magazines, websites, or stock brokerages. They all have an agenda - get your money out of real estate and into the stock they sell.
However, everyone keeps telling us it is a "buyer's market". Doesn't that mean it is a GOOD time to buy? Actually it does! Right now, because of the relentless bad press on real estate, prices have dropped. They have not dropped by double-digit amounts as the press whould lead to you think, but in most markets prices today are 3-5% below the level of a year ago. However, prices have actually gone up in some areas this year. Also, most home owners are not in a "have to" sell situation, so they will not make drastic price cuts, even with the "I'm going to steal a house" mentality many buyers now have.
If you are buying, expect to get a fair price, but not to steal a house. Sellers will just wait you out. Right now, you can buy a house at a reasonable price, but if you wait another year, you may be paying 8-10% or more to buy that same house. That's OK, the sellers are willing to wait.
How about interest rates on mortgages. The press has not been telling you that rates are really low. You can find 30 year fixed rate mortgages at around 6%, give or take a quarter. For 15 year terms, fixed rates are below 6%. Folks, those are LOW rates! Does anyone remember the early 80's - back then 15-18% was common and people went nuts when the rates dropped to the 11-13% range.
Regardless of what the press says, the economy is good right now. Interest rates are low, unemployment figures are low, the economic reports show the economy growing, and if not for rising gas prices we would say the economy is booming.
It is a good time to buy real estate, before the prices and interest rates begin to go back up. And you know they will.
Copyright 2007
Thursday, October 4, 2007
What is this leverage stuff?
Are you looking to become a real estate investor? If so, you have possibly heard the term "leverage" used by someone already in the biz. The concept of leverage is what makes real estate a different kind of investment than stocks, bonds, or mutual funds. Using leverage is like supersizing your available investment funds.
Lets use a simple example to make the leverage concept a little clearer. Say you have $25,000 that you want to invest. If you buy stocks (without consideration of broker fees), you can buy $25,000 worth of the stock. If the stock you like sells for $25 per share, you can buy 1000 shares. If after one year the stock value increases 20%, your stock would be worth $30,000. You made $5000, not too bad - a savings account won't do that for you. The larger gain comes from taking a risk, since the stocks carried no FDIC insurance like the savings account.
Now, about that leverage available to the real estate investment. This concept is based on using what we refer to as OPM (other people's money). If you want to put that same $25,000 into a piece of real estate (not considering closing costs), with the right property, you can get a 75% loan and that means your $25,000 will buy a property valued at $100,000. So, you now have a property valued at $100,000, but you have only put $25,000 into the deal. That is leverage.
Of course you can get into a discussion about making the payments on the $75,000 loan, but that is why tenants were created. There are some other factors that also sweeten the real estate deal, such as depreciation and cash flow. And your $100,000 property only needs a 5% increase in value to recover the 20% return you would have made on the stock.
Both stocks and real estate can go down in value. A decrease in value is far more common in the stock market then in the real estate market and while a particular stock can lose 100% of its value - real estate almost never is worth $0.00.
The Chattanooga area is a great place to invest in real estate. The prices are more moderate than many big cities and it is a great place to live. Here is a great site to learn more: www.ChooseChattanooga.com.
Copyright 2007
Lets use a simple example to make the leverage concept a little clearer. Say you have $25,000 that you want to invest. If you buy stocks (without consideration of broker fees), you can buy $25,000 worth of the stock. If the stock you like sells for $25 per share, you can buy 1000 shares. If after one year the stock value increases 20%, your stock would be worth $30,000. You made $5000, not too bad - a savings account won't do that for you. The larger gain comes from taking a risk, since the stocks carried no FDIC insurance like the savings account.
Now, about that leverage available to the real estate investment. This concept is based on using what we refer to as OPM (other people's money). If you want to put that same $25,000 into a piece of real estate (not considering closing costs), with the right property, you can get a 75% loan and that means your $25,000 will buy a property valued at $100,000. So, you now have a property valued at $100,000, but you have only put $25,000 into the deal. That is leverage.
Of course you can get into a discussion about making the payments on the $75,000 loan, but that is why tenants were created. There are some other factors that also sweeten the real estate deal, such as depreciation and cash flow. And your $100,000 property only needs a 5% increase in value to recover the 20% return you would have made on the stock.
Both stocks and real estate can go down in value. A decrease in value is far more common in the stock market then in the real estate market and while a particular stock can lose 100% of its value - real estate almost never is worth $0.00.
The Chattanooga area is a great place to invest in real estate. The prices are more moderate than many big cities and it is a great place to live. Here is a great site to learn more: www.ChooseChattanooga.com.
Copyright 2007
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