Saturday, October 20, 2012

What's The Latest:
Well, as you may have noticed, the latest weekly report on mortgage rates showed another drop to near record levels. After a slight increase last week, rates dropped again this week to within a single basis point of their all time low. Thirty year fixed loans averaged 3.37%, just a minuscule single basis point above their all time low (there are 100 basis points per a single percentage point of interest). As you know, these rates continue to offer great opportunities for both buyers and sellers. I won't repeat all of the reasons as anyone who's been here regularly has heard them all.

Separately, what I do want to discuss briefly is what the overall housing market is doing and what that should mean for you. Housing starts this past month reached their highest level in almost four years. By housing starts we mean actual taking out of permits for new home construction. This doesn't automatically mean that all of these homes will be immediately be built. However, as each municipality and jurisdiction has specific rules on the process of granting permits and how long they are valid for, it usually means that a home will be started within a certain period of time. As inspections of the interim progress on the construction are usually required, each successful inspection extending the life and specific expiration date of the permit, this means that a completed home will be available for sale on the market in fairly short period of time.

Meanwhile, the fact that so many builders are taking out permits is significant in that it shows builder faith in the improvement of the economy. For a builder to definitively involve himself in a construction project requires a certain leap of faith, as certain hard costs arise up front that can't be cashed out with any hope of profit until the house is completed and ready for market. All of the land acquisition, construction, permit and labor costs are ongoing expenditures, as is the interest paid on those funds, and it won't be until completion that it can be recouped. So we have a definite positive in the real estate market.
What does that mean for you? Put simply, the improving economy means that you have a better opportunity to sell, if that's your goal, in a strengthening economy. Is the economy all the way back yet? Hell, no! But the fact that it's showing enough strength to encourage builders to jump back in is very promising.

Even better in this set of circumstances is the promise of the Fed to hold rates low at least until 2014. That is because normally in an improving economy rates would start to rise. The Fed holding them low to boost the economy can only bode well for you.

Thinking of selling? Unsure of your home's value? Even more uncertain of what sales benefit you'll get by doing something to improve the home? Call us--we can provide you just the facts you need to make an intelligent decision--one that will benefit you immediately and in the long run.

Buying: there are a number of new listings hitting the market. We can provide you full 24/7 access to the Multiple Listings at no cost so you can see new properties as soon as they hit the market, and be better prepared to grab "The One" as soon as it is listed! The lucky numbers?: (Jane): (415) 531-4091; (Peter) (415) 279-6466.


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