Eugene Home Buyers - Sitting On The Fence
Posted by Dennis Pease on Saturday, October 18th, 2008 at 5:44pm.
This report comes a day early this week since I will be on the road early tomorrow morning, but with cell phone and laptop I'll still be able to help you and your clients.
Unfortunately I need to start off with some bad news, in the form of the rates chart below. The increase in the 30 year fixed rate in just one week (10/8 - 10/15) was the largest weekly jump since April of 1987. Now, though this is not particularly good news, it can help you.
If you have buyers on the fence waiting for the “bottom” in home prices, this is the perfect “big stick” to knock them off with. There is a terrific brochure, from the Lane County HBA, making its rounds out there right now, talking about the exceptional buyer's market we're in. I've sent it out to my “fence sitters” and perhaps you have too. If not you should. However, in that brochure it mentions that “30 year fixed rates are currently below 6%”. Well, when that went to press they probably were, but rates have increased dramatically, and your buyers need to know that.
No one knows if those rates will come back down or not, but there have been numerous articles written pointing to the inflationary effects the various “bailout” proposals could have. As I've told you before, inflation, or the fear of inflation, is what drives the bond market prices down and mortgage rates up. So, there are plenty of reasons to believe that if buyers do not act soon they could lose the benefit of the lower prices they've been waiting for.
This makes it a perfect time for you to be contacting the folks you have sitting on the fence. You already have an opinion about the market that you need to talk with them about, and now you have at least one big stick. So, to paraphrase Teddy Roosevelt…………… speak quickly, and hit them with every stick you can get your hands on. (I was hoping someone would stop me before I got that far) 
Have a terrific weekend, and again my cell phone will be on.
The following rates are based on 30 day locks with no discount points, as of this morning. They are not come ons, they are the rates your buyers will most likely get from a reputable lender, regardless of what is advertised. Certainly there are other specialized programs available, depending on the qualifications of the buyer.
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30 year fixed conforming = |
6.375% |
|
|
15 year = |
6.250% |
|
|
3/1 ARM = |
6.500% |
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5/1 ARM = |
6.625% |
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Jumbo fixed = |
6.875% |
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Jumbo ARM = |
7.750% |
|
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FHA/VA 30 year fixed = |
6.500% |
|
|
Prime rate is currently = |
4.500% |
Authored by Lorin Wamsley, CMPS - Senior Mortgage Consultant, Precision Funding
Phone: 541-681-8787
Dennis Pease - Real Estate Broker invites you to see more Eugene Real Estate information and All the Area Real Estate Listings. If you are looking for a mortgage consultant, call Lorin at the number above and tell him you saw him here.
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Share15 Responses to "Eugene Home Buyers - Sitting On The Fence"
We have a lot of people buying second homes in AZ right now due to the market. I hope interest rates hold steady or decrease as I'm enjoying their business. It really is a great time to take advantage of the amazing deals out there right now.
Posted on Monday, February 16th, 2009 at 11:29 AM.
I have had several buyers recently tell me they would rather have their money in real estate now than anywhere else. Good deals can be found in just about any market.
I just read today where the numbers are in for September and Southern California had the biggest increase in home sales in at least 2 decades.
http://tinyurl.com/5m4vad
Posted on Tuesday, February 17th, 2009 at 2:18 AM.
People on the fence used to think that if they fall on one side, there are a bunch of pillows and on the other is a pit of mud. Now they seem to think that there is mud on one side and a bottomless pit on the other. Thanks for that, national media. In many markets prices are low, seller's are motivated and tlthough rates are going up, they are still low. In many area this is a great time to buy.
Posted on Tuesday, February 17th, 2009 at 2:21 AM.
Sam, it looks like some of the buyers are deciding that sitting on that fence is just not that comfortable, so they're getting off.
Posted on Tuesday, February 17th, 2009 at 2:22 AM.
Well said, unfortunately buyers are just waiting for that 'perfect moment' to buy, but of course the question is just how long will they be waiting.
Posted on Tuesday, February 17th, 2009 at 2:24 AM.
Agree. It's quite normal for buyers to "sit on the fence" and wait, something to do with human nature I guess. People tend to be cautious when something's not looking good, not realizing the opportunities that come with it. As agents, we can talk to them but that would mean a good deal of convincing. Most of the time buyers don't think as we do.
Posted on Tuesday, February 17th, 2009 at 2:27 AM.
I've been doing rate/home price comparisons for buyers. For example, if you buy now at 6% and your home still goes down in value but rates go up- which will be better? In most cases it makes sense to buy now at a lower rate.
Posted on Tuesday, February 17th, 2009 at 2:29 AM.
Dylan, I not only agree with your thought process on this but I also wrote a blog over at the forums in April about that.
Lydia Taylor even honored me with her Palmetto State Challenge Award for that post. :)
Posted on Tuesday, February 17th, 2009 at 2:30 AM.
We certainly have a lot of buyers here in Tampa on the fence as well, Tough to fight all the media who should be talking about what a great time to buy for all the reasons you talk about. Nice post Dennis
Posted on Tuesday, February 17th, 2009 at 2:32 AM.
Yes, this definitely is a good time for people to jump into the housing market. With house prices already down, it's definitely a good idea for people to buy before the mortgage prices go up even higher. This is definitely a good way to persuade a prospective client that now is the time to buy!
Posted on Tuesday, February 17th, 2009 at 2:35 AM.
We have more clients now than at anytime in past 18 months. So, I believe people are starting to understand that now is the time for great deals. We have to be near the bottom. Or, I would hope.
Posted on Tuesday, February 17th, 2009 at 2:36 AM.
I think that up mentioned 'perfect moment' is now for buyers-the best way to save and in some cases increase their capital is investing in nowadays real estate!
Greetings from Spain.
Posted on Tuesday, February 17th, 2009 at 2:39 AM.
It is a good time for people to buy before the mortgage prices go up. In many area this is a great time to buy.
Posted on Tuesday, February 17th, 2009 at 2:41 AM.
We know it's a great time to buy. But convincing consumers who have just had the rug pulled out from under them will be difficult. And who can blame them. We have to keep trying to gain their trust again.
Posted on Tuesday, March 17th, 2009 at 10:17 AM.
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We have explained to our clients the positive side to the real estate market now is the prices on the current inventory. We don’t know when the market will get better there are a number of great opportunities right now. However, people would prefer sit on the fence and lose a great deal then to risk making a mistake.
Posted on Monday, February 16th, 2009 at 11:27 AM.