Many people don’t think about shopping for a second home in these cold winter months, especially if they are looking to buy waterfront. BUT if you are looking to get a little more of a bargain, then “Tis the Season” to be shopping.
Typically real estate slows down as the months get colder. This is especially true at the beginning of the year, after the holidays have passed and many peoples budgets are a little tighter. During this time many sellers will be more flexible on their price, knowing that it’s not the prime season to sell.
With second homes, many owners don’t like the idea of having to pay for the high cost of heating during these cold months, if the house isn’t occupied. This is even more true with the higher cost of fuel. Often owners will get the property winterized to save money while others will often leave their homes (or cottages) lightly heated to prevent drywall from cracking or to keep other things from shrinking or expanding from the change in temperature.
Also, with today’s job market (especially here in Michigan, with the auto industry being in trouble), many people are looking to get out from under the extra payment of a second home. If a second home owner experiences a job lose or cut in pay, they often can’t they afford to keep their second home mortgage. When this occurs, sellers can sometimes find themselves in a major financial pinch. In some cases they may need to unload that second home in a hurry to prevent foreclosure. Therefore, they are more willing to take a cut on the fair market value price to move the property more quickly.
Another situation that I often run into is a retired couple (or person) deciding to sell their second home to get rid of the responsibility of maintaining two properties. This can often be a burden when health is failing or they simply don’t find the time or have desire to visit their second home anymore. Another reason might be the need for the extra money because of the lack of adequate income from retirement. Depending on their situation, they may or may not be as flexible on their selling price.
The past few months have given the potential home buyer in Bakersfield plenty of reasons to buy a home. From sellers lowering the prices, to more homes available, to sellers offering incentives, now should be the time to buy if you are thinking about purchasing a home in Del Kern or elsewhere. Now you have another reason to buy: mortgage rates have fallen to the lowest level in a year.
Rates on 30 year mortgages continued to fall throughout November and hit a low point. This has enabled a number of mortgage applications being filed in November because of these low rates. Mortgage applications have remained healthy throughout the month because of this drop in rates. Many feel that these low rates are the final opportunity they needed to get in while the market was ripe for the picking. If any time is a buyers market, now is that time.
If you are a potential home buyer in Bakersfield, you may still be put-off by the dramatic inflation that many properties saw last year. You may still be leery of entering the real estate domain because of the uncertainty it has generated. Well these days the uncertainty should be felt by sellers, not buyers. Buyers are being catered to in an innumerable amount of ways. From free upgrades to free landscaping, sellers are willing to do almost anything to sell their homes these days, except flat out lower the base price. Most developers will do about anything to give you an incentive without lowering the base price because once they lower the base, that sets a new benchmark for the rest of their properties.
Still, this doesn’t mean you can’t get a reduced price for your home in Del Kern. You just have to work with the developer. They will likely be more than happy to give you $5 to $10,000 off the price of a new home, just not straight off the base. The newest trend in offering incentives is the “buydown.” The way this works is the seller makes large payments up front to the loan’s first two years of interest that reduces the monthly payment for the buyer for a few years. This is very enticing for potential buyers because they can use the extra $300 or so per month that they save on furniture and other things that new homeowners like to buy, for the first year. This would be for a home that sold at $225,000. In the second year they still save a good $150 per month on the loan and overall they saved $5,000.
Let’s start with the obvious. Bankers get a commission when they sell you a home loan. A percentage of your loan value goes toward their bonus; because apparently, being paid $4000 – $5000 to sit on their asses and answer phones all day isn’t enough.
Despite a widespread sense that real estate has never been more
expensive in Bakersfield, families in the vast majority of the
country can still buy a house for a smaller share of their income
than they could have a generation ago.
Mortgage rates have fell sharply since the early 1980’s. A
decline in mortgage fees and a rise in incomes have offset rising
house prices in about every market except New York, Washington
D.C., Miami, and the California coast. Economists do not expect a
broad drop in prices in 2006 because of these changes.
The long term decline in housing costs also helps explain why the
homeownership rate remains near a record of almost 69 percent, up
4 percent from a decade ago.
Nationwide, a family earning the median income would have to spend
22 percent of its pretax pay this year on mortgage payments to buy
the median-priced house, according to an analysis by Moody’s
Economy.com, a research company.
The share hit a low of 17 percent in 1998 before increasing
dramatically in many markets. While the overall level has reached
its highest point since 1989, it still remains below the levels of
the early 1980’s, when it was over 30 percent.
In other places families tend to spend much less on housing.
Dallas, for example, the share of income needed to buy a typical
home has fallen to 13 percent this year, down from 31 percent in
1980. Even in high profile places such as Tampa and New England
house values have still not reached the extent of the 1980’s, when
calculated as a share of income.
Affordability is up because interest rates are so low.
As many suburban homes now selling for more than $300,000, young
families still have a much harder time buying a first home than
they did a few years ago. Still, housing has been less expensive
this year – as a share of local incomes – than at any point during
the 1980’s, according to Moody’s Economy.com.
Many families who could not have bought a house 10 or 20 years ago
now find themselves able to do so because of changes in lending.
In the past people often had to make a large downpayment equal to
20 percent of a house’s value to get a loan; today, little or no
down payment is common.
Need a refinance loan with lenient guidelines, or a No Equity (125%) second mortgage home equity loan? Or, do you have a nice home with good equity, but having difficulty meeting income qualifying standards, or your credit score is too low? Now’s the time to get your credit line! We work with lenders that have a loan program for almost every situation!
Consolidate high rate credit card debt (with a tax deductible loan)
Home repair and improvements
Buy a new or used SUV for the family
Take that dream vacation
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Investment cash for new business
or any good reason!
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