The Fed, Stock Market & You

It was an interesting week on Wall Street. It is amazing how much interest that is placed in not just what the Federal Reserve says, but also what it doesn't say! Evidently, because the Fed didn't saying much about inflation and the interest rate, the investors on Wall Street saw that as a statement that the interest rates wouldn't be going up in the immediate future. What does that have to do with you? Good question.

As far as the housing market is concerned, in the views of professional investors on Wall Street, it means interest rates for home loans will continue to be at historic lows. That is great news! With the solid housing market we enjoy in the Greater Cincinnati Area, that means you can buy a home with good expectations that not only will the values continue to increase, but you can buy a home with mortgage payments that are very affordable. Let me give you an example.

A loan for $150,000 on a 30 year, fixed rate loan at 6.5% shows payments being $948.10. If the interest rate increase to only 8.5%, the payment jumps to $1,153.37! When the interest rate climbs to 10.5%, that same loan, or house will cost you $1,372.11 a month! That is $424.01 a month more for the same home that could be bought today.

One more little observation. In 1997 a local title company handed out pamphlets that contained mortgage payment tables. If you knew how much you were borrowing and what the interest rate would be, just look at the tables and you can see what your payment will be. What is rather amazing about this 10 year old pamphlet is that the LOWEST INTEREST RATE it shows is 8% and it goes up to 13.75%!!! Only 10 years ago, the interests rates we are enjoying today were totally unexpected.

When the market is good for buyers, it will also be good for sellers. My suggestion, don't wait for interest rates to return to what was considered normal only a few years ago!

Jim
RE/MAX Elite 513-826-1924

The Price Is Right

    How many years has Bob Barker or his announcer been saying, "And this showcase can be yours, if the price is right!"  As that statement has been true for that popular game show, it is all the more true when it comes to selling a home in today's market.

 

    As a Realtor, I can tell you that it was really nice when all I needed to do was put a sign in a yard to start my phone ringing.  Since the market has changed, I find myself occasionally picking up to phone just to make sure it still has a dial tone.  The market has changed and so have the rules in getting a home sold.

 

    The three big issues in getting a home sold revolve around the marketing being fine tuned for the type of buyers that would be attracted to a specific home, the over all condition of the home and the price.  Of these three, ultimately, the price is crucial.  If priced too aggressively, due to the larger number of homes on the market in contrast to buyers, the home will get few if any showings.  The home must be priced based on the condition of the home and the neighborhood it is in.

 

    Think of it like this, when buying a dress or a suit, you know the size you wear.  It is very unlikely that a size 44 suit will be bought or even seen if it is put on the size 48 rack.  Why would you, or any other buyer, waste their time looking in sizes that they cannot wear?  When applied to our current market, it is all the more true about a home.

 

    So, to win the prize, you will get your home sold,... if the price is right!

Automated Searches, What To Know

Many real estate web sites offer automated searches. In exchange for information on how to contact you, they will set you up to receive automated information about listings.

There are two things you should ask:

1. Is this search being done by a third party software or is it directly part of the Multiple Listing Service? Most companies have third party providers when it comes to searching for homes. This means that information is often filtered and can be delayed or old information by the time it gets to you. It is also possible for a company to deliberately choose not to show all available listings. Get a search that comes directly from the Multiple Listing Service.

2. Is the search only email based or will you be given a personalized site that will allow you to keep homes you are interested in and delete the others? Email notifications are great, however, how can you remember what homes you've already seen? Having a site that is exclusively yours allows you to keep track of all your favorite listings so that you can easily refresh your memory.

If you are looking for a home in the Cincinnati area and don't have an agent who can do this for you, please give me a call. The house you decide to buy will be your home and is too important not to know all you can about the market!

Jim
(513) 826-1924
RE/MAX Elite, Broker, A.B.R.

Is this a good time to buy?

That is a very common question in light of all the things being reported by the news media. In listening to them a person would think that the last thing to invest in is real estate!

Here are two important items to remember in buying or selling in todays market:

1. 2006 was the third best year in real estate since records have been kept. While it wasn't as good as the previous year, compared to almost every year prior to that, it was a tremendous year. However, positive news doesn't get people's attention as negative news does. That is why, even when things are great, we most often hear about some bad issue.

2. Mortgage rates are still at a tremendously low level. It wasn't too long ago that interest rates were between 12% to 18%! They are better than half that now. The person who doesn't buyer today will likely regret it tomorrow if the interest rates rise.

Jim

Welcome

Welcome to the blog designed to share ideas and insights into the world of buying or selling a home. With the changing market, strategies also change. Ideas will be generated here as well as sharing of experiences from people across the country. You are welcome to join us. There are simple rules that 98% of us follow in very day life. First, this is a site for sharing ideas, not debating. Second, there is no space for spamming or crude language.
It's great to have you on board!

Jim

P.S. I'm never too busy for any of your referrals!