Monday, March 23, 2009

The Perfect Storm

I have been asked again and again about when we are going to see the fabled 4.5% interest rate. The answer was always, "I have no idea if that will ever happen". Well we did finally see it! Thursday for a brief period, it dropped to 4.5%. Today it is back at 4.75% but for a brief period it had finally gotten to the point the media has been telling us all about. And we all know that the media is always right... right?
So with 4.5% actually achieved, low prices and an $8000 tax credit for first time home buyers that you can take this year if you buy this year, have we reached the perfect storm in Real Estate? If I had a crystal ball I would know all the answers. But I don't so I can only give my educated opinion.
The first thing to consider is do you have a stable job and a credit score over 620? If you do and plan to stay in the same spot for a while, then yes. This is the perfect time to buy.
I have seen inventory for under $300K drop in Denver dramatically over the last month. If you are interested in buying a HUD home you better be prepared to offer at least $10K over asking on the day it goes to bid.
What all this means is that I think we have reached the bottom and will remain here for at least this year if not start the climb back up in Denver.
The second thing to consider is that if you have a home you are thinking of selling to move up into a bigger home, this may be the time. You may be taking a slight loss on the house you are selling depending on the area but if you wait for interest rates to go back up, you may not be able to afford the house you could have afforded while rates are this low. Plus, with inventory shrinking that means your house will have a better chance of selling. This really goes for houses still under $400K because over $417K and you will be in the Jumbo market which is quite unstable.
I hope this helps anyone thinking of buying or selling right now. I am always available to answer any questions you may have on Real Estate so just give me a call.
Denise Fisher
Real Estate of the Rockies

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