7 Things Home Buyers Should Think About

SEVEN THINGS YOUR CLIENTS SHOULD KNOW ABOUT THE CURRENT HOUSING MARKET

Here are seven simple reasons why this is the best time to buy a new home in several decades.

Fact #1:
Some six million Americans are expected to buy a home this year. Six million people in the game make up a pretty big game. That’s a level of sales equal to the one we experienced in 1998—by all accounts, a pretty good year.

Fact #2:
There is still over $23 trillion of value in U.S. housing stock. Home ownership continues to be the basis of our wealth in this country.

Fact #3: The housing market cannot help but grow. Our country’s tremendous wealth, liquidity, and entrepreneurship will continue to drive our economy. 70-100 million people will be added to our market in the next 40 years.

Fact #4: Real estate is cyclical. The biggest fear in good times is that the fair weather won’t last forever—because it doesn’t. But the reality of a cyclical real estate market also provides its brightest hope in bad times—foul weather won’t last forever either. What’s happening today is a market correction, severe in some places, but it’s not the end of the world. As shown by Fact #1, people are still buying and selling homes. The markets will stabilize.

Fact #5: 2008 is the best year to buy a home in 35 years. 1973 was the last time mortgage rates were this low in a buyer’s market. We had rates this low in 2001 and 2002, but those were strong seller’s markets with little inventory. The last two big buyer’s markets, in the early ‘80s and early ‘90s had much higher rates. Low rates and good inventory make 2008 the best year to buy in decades!

Fact #6: First-time buyers have a real advantage in today’s market. First-time buyers can buy at a reduced price without having to sell at one too. Higher limits on lower cost conforming loans also help first-time buyers purchase more home for their money. Today’s ‘starter’ homes can be pretty impressive.

Fact #7: First-time buyers lose money while they wait on the sidelines. First, renters typically pay more state and federal income taxes than homeowners with a mortgage deduction. Renters are also losing the wealth they could be accumulating as they pay down their mortgage and as their home increases in value over time (as it surely will). Lastly, renters who wait to buy will lose money if interest rates increase by the time they finally act. Higher payments from higher interest rates represent money buyers could have kept if they had bought earlier. Conversely, if they were willing to spend that amount of money earlier, they could have bought more home.

How foggy is it on the Coastside

I am often asked, how foggy is it on the Coastside? And that is not a short answer. The short answer is that on any given day anything can happen. …But you know, I am from Newport Beach, and to me the fog hits the ground. On the San Mateo Coast we have a lot of overcast days, particularly in the summer (June thru August). Brrrr, the weather is in the 70’s this time of year. We only have four or five days a year of fog, on the ground. In fact, in the winter, we tend to be sunnier then San Mateo. Shhhh this is a well hidden fact. Coastsiders don’t want you to know how nice the rest of the year is.

We have weather all year around only 2 or 3 degrees different then San Mateo. What we also have is sun in the summer, but seldom more then 2 or three days in a row. What happens is that when the rest of the county “over the hill” gets hot, it pulls an inversion layer over us. What also happens is that, over-the-hillers decide to come to the beach to get away from the heat. Thus since they are late arriving on the coast, they always come after our sun has gone. This is why we have a reputation for overcast. Come over when it’s cool and sunny, and you will enjoy a cool and sunny Coastside. …but shhhh don’t tell anyone.