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Good News in this San Francisco Real Estate Market?

With many REALTORS leaving the business, it’s no wonder that the San Francisco Association of REALTORS wants to share some good news with us.  In the last edition of the SFAR newsletter for SF real estate agents, they shared the following info with us.

Housing Market May Have Turned a Pivotal Corner
With home prices in many areas declining to the point where owning a home is a more affordable option than renting, especially in the West, many potential home buyers appear to be getting off the fence and starting to purchase.  Add affordable prices to record-low interest rates and the demand for housing has reached a pivotal turning point.

  • Home prices in some areas of California have dropped so much that monthly mortgage payments on single-family homes are comparable to apartment rents, according to recent data.  Mollie Carmichael, a senior vice president with John Burns Real Estate Consulting, says that in the Inland Empire, the average monthly rent for an apartment is $1,157.  Carmichael adds that the average after-tax monthly mortgage payment on a median-priced single-family detached home is $1,154 in the same area.  
  • The large number of distressed properties has led to a surge in home sales around the country.  Existing home sales across the U.S. rose 6.5 percent to an annual rate of 4.74 million units in December, according to the National Association of REALTORS® (NAR).  A senior director of housing economics at Moody’s believes the latest NAR report means sales have reach bottom.  
  • Interest rates on 30-year, fixed-rate mortgages averaged 5.12 percent for the week ending January 22, which is almost 1 percentage point lower than the average rate in late November 2008, according to Freddie Mac.  The prior week, 30-year mortgage rates average 4.96 percent, the lowest since Freddie Mac began its weekly survey in 1971.

I can vouch for the fact that low interest rates and falling prices have, indeed, had an effect on home sales.  In the last two weeks, my phone has been ringing off the hook with buyers that had been waiting on the fence and now want to talk about taking advantage about some of the awesome deals out there.  Of course, it’s still not the right time for all of them to buy.  Some haven’t figured out whether long range plans mesh with home ownership and others don’t have a downpayment yet, but most are ready and eager to pull the trigger on a home of their own.  Are you?