Top 5 Reasons Why Now is a Great Time to Buy!

Although the best time for individuals to purchase a home will mainly depend on their own personal living and financial situations, the present housing market is offering some great opportunities for homebuyers that have not existed for years. 

 

But how do you really know that now is a great time to buy a home? Here are just some of the many factors that are currently influencing the current Buyer’s market:

 

1.) Home prices are very competitive

• Existing home sales in 2009 have turned the corner and have proven that our market is stabilizing, and with Bay Area median home prices down around their 2001 levels housing inventory has decreased 100% from this time last year and has returned to healthy long-term ranges  
• Home prices in many communities are still down 25-40% over their 2005 peaks
• In some areas you might find a home selling for less than it sold 10-15 years ago!
• And with the abundance of foreclosures and short sales lined up for 2010, banks are willing to negotiate in order to get these properties off their books - good deals are everywhere!

2.) Homeownership offers tax incentives

• Owning real estate and paying mortgage interest is still the best income tax deduction you can have
• The Federal Government has extended and improved the First Time Homebuyer Tax Credit, for a limited time qualifying buyers can receive a tax credit up to 10.0% of the sales price (maximum credit of $8,000) while previous homeowners (move-up buyers) can qualify for a tax credit up to $6,500.
• The tax credit will expire, you must have your sales contract signed by April 30^th and you must close on the purchase no later than June 30th!

3.) The current interest rates associated with home loans have fallen below 40-year lows with 30 year fixed rate mortgages offering 4.5% to 5.0%

• Surprisingly the rates offered right now on conforming 30 year fixed rate loans are posting some of the lowest rates ever recorded since Freddie Mac started their mortgage interest rate surveys back in the 1970's.
• Over the past 36 years, there have only been three other years when interest rates were even as close as low as it is today – back in 2003, 2004 and 2005, which was during the last housing boom.
• There are still many loan programs for deserving buyers - Fannie Mae, Freddie Mac, FHA, CalHFA all offer loans up to $729,750 at phenomenal rates with little to nothing down (0% to 10%)

4.) Will rates go even lower?  Don’t count on it!  

• At the end of 2008 the Federal Government implemented a program that focused on keeping interest rates low on conforming 30 year fixed loan programs, more specifically the US Treasury has been actively purchasing Fannie Mae and Freddie Mac mortgage-backed securities (MBS) in order to artificially keep rates low, but their trillion-dollar plan is drawing to end and it is expected they will stop these purchases sometime by the end of first quarter 2010. So without the Treasury actively purchasing MBS there will be no where for rates to go but up.

5.) Real estate is still a worthy long-term investment

• The 38-year annual appreciation rate for California real estate is 7.75 percent.
• New housing starts in California are down 70% from their 2006 levels – less supply on the market will lead to faster home appreciation
• Compared to other parts of California, the Bay Area housing market is – and always has been – even more stable and dependable. Our local market has long been characterized by an increasing supply-demand imbalance: Silicon Valley continues to enjoy a booming economy while limited land and environmental concerns restricts the development of new housing tracts.
• San Jose ranks third, and San Francisco ranks fourth among the top 10 best performing real estate markets in the nation, according to Forbes.