Real Estate News from the Valley Voice Newspaper

Buyers Get Jolly Over Low Interest Rates

  Santa may not be bringing you that widescreen TV this year, but he is delivering some record low interest rates this holiday season. Freddie Mac’s weekly survey for Dec. 18 showed average 30-year interest rates down to 5.19%, compared to 5.47% last week and 6.5% at the end of October.
  “That’s really improving the affordability of our homes,” says local builder Don Fulbright. The veteran builder can get cheaper financing through USDA for rural Tulare County homes that he builds in Farmersville. “We can get a home buyer in for $950 and around a $1,000 payment every month. Cheaper than rent.”
  Bargain rates and lower home prices may tag team to change the wait til’ tomorrow attitude that has to change to get us out of this downslide.
  “We’re seeing some loans at the high 4s,” says mortgage broker Greg Sherman. The real estate web site Zillow says the average 30-year mortgage right now is at 5 percent – the best rates in 37 years.
  Realtor Brad Maaske says a 5 percent loan including principle and interest is about $530 per every $100,000. So borrowing $200,000 would cost you $1,060 – enough to buy a median priced home in Tulare County. That’s around $225,000.
  Maaske says a $90,000 condo he sold recently is rented out for $800 a month. But the new buyer wants to live in it and will pay 3 percent down and $677 a month including principle, interest and taxes. “Why rent?” asks Maaske. [...]

  “I think this thing has hit bottom,” suggests Masske.

New Home Builders Hit Hard

  According to DataQuick, the median price of a new home in Tulare County in September was $226,000, compared to $255,000 a year before. Resale homes are cheaper with a median at $158,000 compared to $209,000 in September 2007.
[...]   Some builders cite the early 1980s as a time similar to this when a number of home builders went bust. The difference back then was 12 to18 percent interest rates. “I think it was tougher back then” says Don Fulbright who launched his company in 1975.[...]

  The pace of sales in Tulare County is way up from a year ago, reports DataQuick, with 250 transactions in September 2008 compared to 166 in September 2007.

  Visalia businessman Lloyd Pace owns JMT Document Service that has offered its services nationwide since 1978. Pace says he works with national lenders who contract with his company to send final purchase documents to buyers across the country for quick notary service. Pace says the company had been doing 350 transactions daily before the housing crisis hit and that fell to under 100 a day last February and stayed that way until October. In October, it rose and fell again. But by December 1, the pace of signature transactions jumped again to about 250 a day, he says, “and now we believe it will stay up,” suggesting the bottom of the housing crisis may have been reached.

  Pushing some buyers to make a deal now is a $7,500 tax credit to buyers that you could get back as soon as February with the filing of your 2008 tax return. That credit is available in 2009 but you don’t get it back until you file that year’s tax return.

  Meanwhile, there are some deals with a big bow around them this season, like the one realtor Phil Vandergrift of Tulare recalls. This is a well-built 1,700-square-foot, two-bedroom, two-bath that sold three years ago for $220,000 and has been foreclosed and recently went back on the market and is now for sale for $87,000.

  Clearly the rate plunge is also spurring a refinance wave across the country and in our area. Refinance applications have doubled in recent weeks. Buyers are cutting their costs to buy a piece of the dream – a home in California – once considered out of reach for the average person. DataQuick says the typical mortgage payment is now $1,198, compared to $1,951 in November 2007.

©The Valley Voice Newspaper - http://www.valleyvoicenewspaper.com