“Interest Rates, Housing Bottom and Housing Inventory”

The mortgage rates for today, May 11, 2009 on a $350,000 loan is:
30 year fixed rate at 4.750% with 1 point with an APR of 4.873% at Country Wide Home Loans owned by Back of America. http://www.countrywide.com/rates/TodaysRates.asp?Action=Recalculate
30 year fixed rate at 4.875% with an APR of 5.086% at Wells Fargo Home Mortgage. FHA loans are at 5.00% with an APR of 5.645%
https://www.wellsfargo.com/mortgage/rates/

These present rates are excellent for our country. It can stimulate the housing economy and at best the overall consumer economy. The rates will fluctuate up and down for weeks to come. Hopefully they will not rise too much more.

I would like to start this conversation off by stating that if you have a secure job and you do not anticipate a layoff or a cut in employment hours, then this may be the perfect time for you to buy a home. And there’s one more thing to keep in mind about this report; refers to New Jersey and related regional areas.

Inventory is starting to sell because of the low rates and also because home owners are pricing their homes correctly. Some can not price the house correctly due to the fact that they owe more than what the house is worth. For example; if their balance is $300,000 and the house they want to sell is only worth $265,000, they must price it below $300,000. If they sell the house for less then what they owe then they must pay the short fall of the balance, which in this example the seller would have to pay the bank for the difference of $35,000, if they sold the house for $265,000. Plus they also have to pay for their closing costs. Some of those costs could be their attorney fees and the New Jersey Realty Transfer Fee. There could be some other expenses too.

If the house is already in foreclosure and the bank that holds the mortgage has approved for a Short Sale of the property, then the house is more than likely to sell fast as long as it is in good condition. Some of the foreclosure homes are in need of repair. Some home owners, out of frustration, purposely destroyed the premises when they moved out so that the bank would have a hard time selling it.

The Housing Market’s Improving. Inventory is selling faster due to low interest rates and the housing market is improving. We can now see a bottoming formation baseline of some stability in prices. Of course some states such as California and Florida still have a large inventory that was sold at the height of the real estate boom and unfortunately for the home owners in pre-foreclosure or foreclosure still face a financial difficultly.


First Time Home Buyers $8,000 Credit. Another incentive for first time home buyers is an $8,000 tax credit they can file on their tax return. (See May 4th Blog at http://www.cmaratta.remax-nj.com/remaxnj/modules/agent/agent.asp?p=agentblog.asp )
Who qualifies? Anyone buying a principal residence home between Jan 1, 2009 and December 1, 2009.

Multiple Offers. During the first week of May I showed a home that was on the market for only four days to a prospective purchaser. The house was in excellent condition with many upgrades, in a desirable neighborhood, a level lot, and this house was maintained properly over the last 40 years. I knew right immediately it was going to sell fast to the right purchaser. You see, it seems many homes on the market that I have looked at over the last two years since this real estate credit catastrophe, are in poor condition or they are over priced or both. Well, this house was neither; therefore I knew it would sell to the next available qualified buyer. That house went under contract in seven days after three offers and two additional backup offers. That’s a total of five offers on that one home because it was priced right. Of course the highest bid was awarded the acceptance.

The Housing Bottom is Forming. Multiple offers in the past were normal in the real estate boom. Now we are seeing more of them and that is a good sign for the economy. It does not mean we are seeing a return of the boom. When buyers know the house is priced right and when sellers cooperate you will see more multiple offers. It also means the housing market is starting to see a bottom and its forming a baseline where we can stabilize prices. We may possibly see an appreciation in home prices in the near future or next year but a small one at that.


Charles J. Maratta
Broker Salesperson
Re/Max Elite Services
38 Righter Road
Denville, NJ 07834
973-625-1313
201-704-6792 Mobile Direct
973-398-3813 Facsimile
charlesm@remax.net
www.wowsweethome.com