Over the past few years we at the Hamad Law Firm, LLC, have watched as the real estate market – both residential and commercial – plummet from its heights to lows we never thought we’d see.  As you might imagine – and might be experiencing – this has scared away prospective property purchasers.  Homes and other buildings have sat on the market for months and years at a time, with buyers and sellers unwilling or unable to agree on a price that satisfies both, as well as any mortgage-holders.  Buyers don’t want to get involved, fearing further drops, and unwilling to pay even what sellers are willing to settle for.  With all of this going on, the market may be starting to turn – and you can get in on it early.

I’m not going to sit here and tell you that buying property right now is a sure thing – it never is.  But if you’re careful, if you study your opportunities, you can buy newer, nicer homes now for less money than ever before possible.  Don’t plan on flipping property (though it can be done), but rather on long-term ownership.  If you’re planning on buying for the long term, todays prices (and more importantly, interest rates), make the real estate market a good place to put your money.

Some points to consider:

First, as mentioned, consider what current interest rates are.  A 30-year fixed-rate mortgage can be had for under 4% right now – with no points.  If you’re looking at an FHA 30-year loan you may be able to reach as low as 3.75%.  A 15-year loan can be had as low as 3.25%.  If you are looking at short term investing, a 5/1 ARM product can be had as low as 2.75%.  At these rates, borrowing money has become so cheap it actually makes up a good portion of the savings on a home.

Consider this: At an interest rate of 6%, a conventional 30-year loan of $300,000 costs a total of over $647,000.  At 4%, this same loan costs about $132,000 less over 30-years – that’s almost half the amount of principal!  In monthly terms, the loan drops from $1798 to $1432, about $368 per month in savings.  That’s the incredible difference between interest rates of a few years ago, to interest rates now.

Now loans HAVE become more difficult to come by.  You do need to be well qualified (especially to get the best rates), and the more money you can bring to closing, the better.  But loans – many of them – are still being closed every day.  You can get loans with low credit scores (at least down to 620) and with almost no money to put down, if necessary.

Second, if you are currently renting a home (or office/business space), you’re paying somebody to, yes, handle things such as repairs for you, but you’re also paying for their profit margins.  With real estate prices so low, why do that?  If you have a steady job and you’re going to be in the same place for a number of years, you can settle yourself into your own home or space.  You no longer have to deal with the whims of a landlord or the risk of price increases.  In fact, rental vacancy rates are very low and going lower right now.  That is to say, so many people are renting rather than buying that it’s relatively hard to find available rentals, and when it is, prices are high and going higher.

Third, the market is weak.  This relates to pricing, which I think we can agree is obvious, but it also relates to the amount of choices you have.  There is a LOT of real estate on the market.  You can skip the real estate that requires fixing up, or has a bad roof, or whatever else.  You can have the place that you love, in the location that you love – not that you have to settle for.

In summary, if you have the ability to purchase real estate – for whatever purpose – now may be the time to do so.  A combination of low prices, low interest rates, and a large amounts of choice, makes this a great time to buy for certain purchasers.  Contact us today if you need help buying or selling a property, or even if you just need advice as to who to talk to in the mortgage market, the Realtor market, or anything else.