Thursday, May 17, 2012 / by Barb Schlinker
Interest rates hit a historic low today, according to Housing Wire magazine... The Freddie Mac survey showed the 30-year fixed rate mortgage averaged 3.79% for the week ending Thursday — the lowest rate ever recorded — inching down from the prior week's record average of 3.83%. Last year at this time, the 30-year FRM averaged 4.61%. What is even better is a 15 year mortgage the rates hit 3.04%. That really is astonishing.
When you consider you can buy a $300,000 home for around $1500 per month in this area (30 year fixed at 3.75%, principal interest, taxes and insurance), it really is THE PERFECT time to buy a home. Further most industry experts believe the market is bouncing off its bottom. Our inventory of available homes is down by 29% from a year ago and prices of homes are starting to climb.
Just a few days ago, one of our clients sold his old, little 1400 square foot home he bought in 2005 with a payment of $1150 per month (loan amount $146,000 on a teeny lot. The same day they bought a ranch in Peyton on 15 treed acres with an 8 stall barn and a 2400 square foot home for a new payment of $1550 per month and paid just under $300,000 with a VA loan and no money down! Wow! That happy family of 7 is living the Colorado dream!
The state of our current market in the Monument, Colorado Springs, Fountain & Woodland Park is not that bad. Homes are selling for 97% of asking price on average (county wide). The average days-on-the-market is declining to 87 days and we are starting to see multiple offers on even retail homes. The number of distress sale homes available is about 22-25%. That means a savvy buyer has a 25% chance of getting a terrific deal and a historically low, rock bottom interest rate on their mortgage. The amount of listed bank owned homes is declining. Great deals on bank owned homes are still in our inventory. However, industry experts believe the entities that carry bank owned inventory are holding back on releasing a large volume of bank owned homes to maintain and support every one’s market values. Another way to get a great deal on a home is to purchase a short sale. Most buyers are receiving as much as a 15% discount on their purchase price by being willing to wait out the short sale approval process. So when a smart buyer couple the historic low interest rates with a great deal on a short sale home they are off to making a terrific investment in real estate.