The "Perfect Storm" - when multiple conditions converge to create an unusually strong force.  Typically unexpected, unforeseen, and rare.  That is what we are seeing in the home buying marketplace right now.  Has it peaked yet?  How long will it go on?  Difficult questions to answer... you never know until after it has played out.

Why do I describe the current real estate market as the "Perfect Storm"?  Just look at the factors that are converging.  1) Interest rates at record lows.  Freddie Mac reported that the average 30 year mortgage rate at 5.01% is the lowest that they have seen since they started tracking.  Low interest rates create great buying power by themselves, but... 2) Huge price declines on homes.  In some areas of Contra Costa County (CA) home prices are more than 50% lower than just 2-3 years ago.  We are back to 2003-2004 price levels in other neighborhoods.  Just those two factors alone create a huge buying opportunity, but add in... 3) Diminished competition.  Yes, these factors don't mean a lot if you are not in a position to buy real estate.  And many people right now are not.  But if you have the down payment and can qualify for a mortgage, you are in a fabulous position to take advantage of the current conditions.  With less competition you can make your best deal.  On top of all this is... 4) Expanded government assistance.  For first time homebuyers up to a $7500 tax credit is now available.  What more can you ask for?

So with all of these factors in place, why is the market not taking off like a bottle rocket?  Well, in some places it is, but the media does not track micro-markets well.  And the headlines mislead.  A recent headline stated how new pending sales were down substantially nationwide.  As you read the article, you see that in the West, new pendings were still up 17% higher than the for the same month last year.  And of course, everyone is concerned with the economy (rightly so) and there is a great deal of hesitation to make a large purchase.  But keep in mind two things - you don't make the best financial decisions by following the crowd.  Ask anyone who overbid a home in 2005.  And more millionaires were made during the Great Depression than in any other time period in US History.

If you are at all interested in buying a home, investment property, vacation home.... take some time to research mortgage rates and programs, talk to a lender about how much you can qualify for, do some property searches on-line (our other website at www.homesourcerealestate.com is very user friendly) and do the analysis for yourself in your specific situation. 

You don't want to look back and regret seizing the best opportunity in a lifetime to buy and own real estate.

For questions call me at 800-570-5866.

Mark Williams