Urgent News for Santa Clarita Area Home Buyers

Urgent - What Every Santa Clarita Buyer Needs to Know

... about Today's Home Buying Market! 
 

 and ... Check Out Our 'Priority One' Buyer Advantage.
 
We make it easier for you to find a great home.

  • There may never be a better time to buy!
  • Why is harder for some buyers to buy a home right now?
  • Why not just wait?  What's at stake?
  • Buy now vs wait - Example
  • How you can be successful when others aren't.

 

There may never be a better time to buy?

 - The Spring 2013 - Home prices are nearly half what they were at the peak of the market in 2006. 

- Interest Rates: Rates are the lowest in decades, if not ever, for home financing.  Rates are currently close to 3 1/2 % for a 30 year fixed loan.

- House Payment Less Than Rent.  Despite lower home prices and interest rates, rents have continued to increase.  In many cases you can purchase a home for the same payment or sometimes even less than it would cost to rent that same property. 

- Property Values Increasing:  The median price of a home in Santa Clarita, as of February 2013, is up 20% from February 2012.   Santa Clarita and many parts of the United States are showing strong upward movement in prices. This is giving buyers confidence that if they buy a home today it is more likely to increase in value in the near future.


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 Why is it so hard for some buyers to buy a home right now? 

If your price range is below $700,000.

- Backlog of Buyers: Since 2006 the majority of buyers who normally would have bought a home have postponed their purchase until now.  Basically there are 7+ years of buyers all entering the home buying market at the same time.

- Investors: Large and small investors have done the math and strongly believe that this is an incredible time to buy real estate. They are willing to pay current or even over appraised value for homes, often all cash.

- Fewer Homes for Sale:  Because home values are so low, many homeowners no longer have enough equity in their homes to sell. They are just waiting for property values to go back up enough so they can sell.

- Fewer Distressed Properties: The number of bank owned, 'Foreclosed', homes is down sharply.  Also the number of homes going into pre-foreclosure is also dropping.


 

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Why not just wait?  What's at stake?

When will More Homes be Available?  -  Unfortunatly this will only happen with a combination of higher prices and higher interest rates.  Eventually the number of buyers and sellers will balance out and the market demand will return to a more normal balance.  But by then you will not get as much home for your money, possibly significantly less.  

  • Higher Prices:  As prices increase, fewer buyers will be able to afford the homes. 
     
  • More Sellers:  As prices go higher, more homeowners will have enough equity in their homes and be able to sell.  This will increase the supply of homes available for purchase, but prices will be higher.
     
  • Fewer Investors:  Once prices have gone up significantly, and appreciation rates level out, fewer investors will look to Real Estate to make investments.  
     
  • Higher Interest Rates:  Eventually as the economy improves, the government will allow interest rates to rise.  This combined with the higher prices will reduce the number of buyers who can afford to purchase in any particular price range.  

 

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 Buy Now vs Wait - Example: **

Today's cost to purchase a home vs. a hypothetical purchase 1 year from now.  Assumes a 10% increase in price and a 1% increase in interest rates.

Spring 2013
Market Value: $400,000
10% down payment: $40,000
PI Payment at 3.5% Interest Rate 30 year fixed: $1,616.56
Property Taxes at 1.25%: $5,000/year or $416.67/mo.
Total Estimated PIT monthly Payment: $2,033.23 
(PIT - Principal, Interest, Taxes) 

Spring 2014
Market Value $440,000
10% down payment: $44,000
PI Payment at 4.5% Interest Rate 30 year fixed: $2,006.47
Property Taxes at 1.25%: $5,500/year or $458.33/mo.
Total Estimated PIT monthly Payment: $2,468.81

This is an increase of $431.58 per month and an additional $4,000 needed for a down payment.  This significantly higher cost with just a 1% increase in interest rate and only a 10% increase in price.  What if it is more?

Ask yourself.  Which way do you think the economy is going over the next few years?  If it stays flat, then there is no harm in waiting.  But if it improves, you won't be able to go back in time and get today's buying opportunities.

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 How you can be successful when others aren't?

If it makes sense to you to buy your next home now, then you need to pull out all the stops.  The normal process of finding and buying a great home won't work right now.  Just ask anyone you know who is looking for a home and you will see how frustrated they are.

Click Here to see how our 'Priority One' Buyer Advantage Option can make the difference in getting you the right home before it's too late!

 

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 ** This example does not include additional cost of ownership such as homeowners insurance, special property tax districts or homeowners association dues as these are not likely to significantly change based on appreciation or higher interst rates.