REAL ESTATE SNAPSHOT

The real estate opportunities right now are unprecedented.

Distressed properties, also known as short sales and foreclosures, are indeed the bulk of real estate inventory. And, sadly, many home owners have suffered hardships causing them to lose these homes. Additionally, “traditional” sellers are bearing the brunt of the market as their home values have been driven down alongside the others.

But for investors, first-time buyers and those with the ability to move up, the market couldn't be better. Interest rates are hovering around 4 ¼ to 4 ½ % right now for 30 year fixed rate loans. That’s outstanding.

Now there are some out there who want to wait to buy and see if prices go down some more. The average sale prices of single family homes in Ventura dropped about 5% over the last year, so that may seem like a good plan at first blush. But here’s some food for thought...

Since the entry level homes are driving the market, let’s say we’re looking at a home for $400,000 with a 10% down payment and a 4.5% interest rate. Your payment (including taxes and insurance) would be about $2324 per month.

Let’s suppose that home values decline by 5% and interest rates go up 1 %. You’re buying the same home for $380,000 (a 5% lower price) with a 10% down payment and a 5.5% interest rate. Your payment would now be about $2417 per month. Hmmm.

I left my crystal ball at home, but I’d be willing to bet interest rates will go up before anything remarkable transpires in home values. My counsel would be to take advantage if you can. We won’t know the bottom has hit until it’s already in the past.