Thursday, July 17, 2008

The Bottom is Near

Are you looking for the real estate bottom? Guess what? The bottom is near and approaching quickly. If you are timing the market here in the San Fernando Valley, your wait is over.

Currently, we are in a VERY STRONG BUYERS MARKET.

The only people buying now are the cash investors, buyers who have 15-30% down, and home-buyers who can qualify for an FHA loan (3% down).

Unfortunately, it's getting harder for the average home-buyer to get a home loan. Most people cannot qualify for an FHA loan because either they don't make enough money or make enough but in a form which is not documented. Also, asking a stated income and asset buyer to invest 30% in a home just to secure a home-loan is difficult. Most people don't have that kind of money.

It's obvious that some areas of the valley and in certain price ranges have bottomed-out already. The banks are getting more eager to unload their properties quickly. This is leading to discounted bank owned homes selling within a few days.

For example, within the past month, I've noticed bank owned homes in Sherman Oaks selling in the high 400's. This was unheard of just a few years ago when the same house was selling in the mid 600's.

Plus, not all areas of the San Fernando Valley have experienced price decline equally. In less affluent neighborhoods, home-priced have plummeted up to 60% off it's market high just a few short years ago. In wealthy areas like Studio City & Sherman Oaks, home-prices have fallen an average of 25%. So it always pays to buy a home in a wealthy neighborhood - less market volatility.

If you are ready to purchase a home now, the first step is to get pre-approved for a home loan. Getting pre-approved for a home loan is required if you are considering purchasing a bank owned home. Simply having good credit and cash in the bank doesn't make you a candidate for a home loan.

Written by:
Richard Johnston, RE/MAX OTB
Burbank real estate home specialist

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