Low mortgage rates and high inventory favor home buyers
Glenwood Springs, CO Colorado
Forget about the “gloom and doom,” it is time to get off the fence and take action.
The national news media has been, and still is, drawing a “gloom and doom” picture of the national real estate market. And while this picture might be true for some market, where do we stand here in the Roaring Fork Valley and Garfield County?
While markets in Florida, California and the Midwest especially have been hit quite drastically with declining property values, foreclosures and extraordinary high inventory levels, our market in the Roaring Fork Valley and Garfield County looks different.
Keeping in mind that not all real estate markets are created equal and hence not all of the bad press applies to all markets in the same way, let’s take a closer look:
Median home prices have increased by 3 percent from 2007 to 2008 and are up 14 percent for the first 2 months of 2009, according to Tammy Sommerfeld of Land Title Guarantee Co. Admittedly, there are far fewer transactions recorded for the year 2008, namely a 44.4 percent drop from 2007 in total transaction sides. And for January and February 2009 we saw an even bigger drop in transaction sides as well as in sales volume. For buyers this translates into more inventory on the market than in the years before to choose from and more motivated sellers.
On the other side we see stable property values and hence less foreclosures and short sales than in other regions of the U.S., showing that an investment in the local real estate market is still a sound one.
All this paired with favorable interest rates of about 4.75 percent for a 30-year fixed FHA loan (subject to individual credit), 4.625 percent for a 30-year fixed conventional loan (subject to individual credit) and the $8,000 first-time home buyer tax credit is the perfect recipe for getting out there and finding a great new home here in the Roaring Fork Valley, according to Susie Meraz of Wells Fargo Home Mortgage in Glenwood Springs.
Still, it seems, looking at the low transaction sides of the last months, potential buyers are waiting seemingly for property prices to drop dramatically.
Without going into speculation about whether Garfield County has reached the bottom of the market yet or not, we need to be aware that one never knows if rock bottom has been hit until prices are on their way back up again. And many buyers don’t realize that an increase in their mortgage rate will completely eliminate any advantage they may have gained by waiting for prices to decrease by a few thousand dollars more.
Long story short: Don’t wait until these great mortgage rates go up while waiting (maybe in vain) for property prices to drop and the best deals are being grabbed by someone else.
Friederike French, with RE/MAX Mountain West, is on the Glenwood Springs Association of Realtors Public Relations Committee. She can be reached at 618-2000.
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