Karen Urata Realtor

Posts Tagged ‘Interest rate’

Is It a Buyer’s Market or a Seller’s Market?

In CA, El Cajon, Escondido, Mission Valley, North San Diego County, Oceanside, Poway, Ramona, Real Estate, San Diego County, San Marcos, Santee, Uncategorized, Vista on January 11, 2013 at 5:08 am
Interest Rates

Interest Rates (Photo credit: 401(K) 2013)

Is it a buyer’s market or a seller’s market? is probably the question that I hear most often and of course, the answer to that question changes over time.

Sometimes, when there are lots of homes on the market, and not too many ready willing and able buyers, we see a buyer’s market.  This means that, generally speaking, buyers are in a position to ask for concessions, such as a laundry list of repairs, extensive credits, and often make offers under the list price.  Buyers often try to time their purchase for a buyer’s market because they feel that they can get more house for their money that way.  Other times, when there are lots of buyers and not too many homes on the market, we see a seller’s market.  This means that, generally speaking, sellers are in a position to ask for concessions, such as no contingencies, no repairs and purchase prices exceeding the list price.  Sellers often try to time to time their sale for a seller’s market because they feel that they can get the best return on their home  that way.

But sometimes, like now, we see a market that is both a buyer’s market and a seller’s market at the same time.  That can happen when there is low inventory, or few homes available on the market creating a larger return for sellers and low-interest rates, that result in buyers actually getting more home for their money.

What the heck, how does that work?  Well, the largest factor in the actual cost of a home is the interest rate, not the purchase price.  Did you know that a change (reduction) of half a percent on a home with the loan amount of $300,000  from3.5% interest to 3% interest represents a reduction of  $82.32 an month  in your monthly payment. Your principle payment would drop from $1347.13 to $1264.81.   In this example, the half a percent interest rate change represents approximately $20,000 more in purchasing power.  In other words, you would have approximately the same principle payment on a loan amount of $300,000 at 3.5% interest as you would on a loan amount of $320,000 at $3.0% interest, not to mention that now you can qualify for  a home that has $20,000 worth of additional features that you would not have qualified for at the higher interest rate.  This could actually change the neighborhood that you live in or the size of the house your family grows up in.

Having the right knowledge can really make a difference in maximizing the benefit for everyone in a transaction.  If you are thinking of buying or selling now is a great time.

Just call me and we can talk about how you can maximize your benefit when buying or selling in this buyer’s and seller’s market in San Diego County.

See you in the neighborhood,

Karen Urata

DRE License # 01720025

B W Real Estate Group

(760) 609-0952

5-Star Award Winner  San Diego Magazine 2010, 2011, 2012

Serving Buyers and Sellers in San Diego County

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