More Inventory + Lower Mortgage Rates = Advantage Buyers…Plus Building Permits Tumble
Spring has arrived, and along with it, arguably, the busiest time of year for the real estate market. So what’s happening? Well, so far, sales have been off about 15% and way off if you add in new homes which were down 32.4% from this time last year. It is suffice it to say, that drop in closed new home sales is one of the factors scaring the builders into the biggest permit application tumble since the Great Recession. The Feds, once barking at us all that rates were going up and quickly, retracted that stance and how — now proclaiming that rates will not move again this year.
If you are buyer, what are you waiting for? Yeah, read it again if you need to because it has taken awhile for the public to realize what real estate insiders have know since February…it’s a great time to buy, because your purchasing power, if you are a buyer, it’s back at 2017 levels. Rates were actually quite a bit higher for most of 2018 and that turned a lot of buyers off. Unfortunately, they’ve not circled back to see what’s up…or rather down, with the market. Now paper’s are reporting inventory is up, and in some pockets of OC, it is, and certainly in Riverside and San Bernardino. However, much of OC remains tight in smaller bedroom communities where demand is still high. One should not navigate on one’s own. No matter how good Zillow, RedFin, or numerous other sites may be, having someone actually be bond by fiduciary duty, negotiating on your behalf, is a good thing. In 1980, both the listing contract and the purchase contract, were one page. The entire legal document, produced by the California Association of Realtors, was one page! If you have bought a home in the last 10 years, then you know, the files are now inches thick and there are more disclosures and clauses than fingers and toes added together. Having said that, people that are seriously about building wealth and/or retirement income, buy homes anyway. So should we all.