Is the Boom back?

In January, Santa Clara County real estate sales were the highest number since 1989. Historically our real estate tends to follow Silicon Valley by 3 to 4 months, so my prognosis is that we will see an upturn in area home sales soon. This can be a bit upsetting to not only first time buyers trying to crack open the “least affordable” housing market in the U.S.; but also, the baby boomers starting to plan for their retirement, empty-nesting, and buying that vacation/ retirement home. It is a matter of fact that as home values move up, the smaller starter homes increase in value much faster than the larger homes. Simply put, the more expensive the property then the fewer financially qualified buyers are available. So, the boomers that have been dreaming about that smaller home near the beach or in the mountains will have to compete with the first time buyer entering the market making that home more expensive; and, the boomers larger home not appreciating in value as much. People who had been counting on selling their present home and owning their retirement home “free & clear”, and also having enough left over to fund their retirement will have a very rude awakening if they want to stay in the area!
How to get out of the cycle? One way is if you have enough equity in your home now is to refinance the mortgage and pull out the cash now and buy that retirement home now before the price gets too far gone! For some it may mean becoming a landlord and renting out their new purchase until they retire in order to swing it, but it may be a way to save your dream! Sometimes there are other possible ways to accomplish this, give us a call and we can see what may work for you.

Fixed rates for conforming mortgages (loans under $300,700) as of March 20, are:
30 year fixed: 6.625% (APR 6.92%) payments are $1,925.42/month
15 year fixed: 6.125% (APR 6.61%) payments are $2,557.83/month