7 Reasons Why It’s a GREAT Time To Buy A Home in CA

There’s been a lot of talk recently about why it’s NOT a good time to buy a home, but I disagree. And today I’m going to share a few reasons why. This is a MUST READ post for anyone in the market (or considering entering the market) to buy a home.

Date: 7th December 2022 

#1 People keep saying that prices are dropping, but are they actually?

I keep hearing, “Prices are dropping. I’ll wait for them to drop even more.” — but are prices actually dropping?

What people have been noticing lately is that LIST prices are dropping — but that’s because many of these homes hit the market before the rate increase, and sellers were shooting for the moon.

If you pay attention to SOLD prices instead of LIST prices, you’ll see that there’s still an upward trend.

 

 #2 The rate increase is an OPPORTUNITY.

Many buyers became deterred from entering the market this past year because they either heard or experienced first hand that the home buying process was going to be a 9-month long stressful experience filled with bidding wars and rejected offers.

Couple those reasons with a rate increase, and many buyers have completely left the market. This creates an opportunity.

Bidding wars… Removing inspection contingencies from your offer… Bidding blind against yourself… Those days are over.

Buyers now have more negotiating power. Today, you can write an offer based on what comparable homes are actually selling for, not based on projections of ridiculous appreciation.

Rates suck in comparison to last year, but now you can subtract out 9 months of stress and heartbreak and actually write offers you’ll feel good about afterwards.

 

#3 You can fix the rates, but you can’t change what you paid for the house.

Home buyers often forgot this one simple fact when rates go up. Rates going up create opportunities to find deals.

In the medium to long term, you get the house at a better price and you can refinance when rates drop — so you end up with the best of both worlds.

In recent history, rates increased 1% over the course of the year in 2018. Every single person who hated their rate got a better deal on their house AND got to refinance in 2021/2022. Best of both worlds!

 

#4 Everything is happening FASTER now.

Underwriters, appraisers, loan officers, inspectors are all LESS BUSY than they were a few months ago. The result is FASTER closings.

Over the past two months, we’ve been closing homes in less than 30 days, which was all but an impossibility earlier this year due to how backed up everyone was.

 

#5 Lenders are offering loans with NO POINTS and NO FEES.

For the majority of our mortgages, we’ve been offering loans with no lender points and no lender fees.

The most important thing when obtaining a mortgage isn’t getting the lowest RATE; it’s getting the lowest FEES. You CAN undo interest rates. You CANNOT undo points, fees, or purchase price.

Consider the higher mortgage rate a temporary holding cost until you can refinance in the future. Rates tend to follow inflation. They followed inflation upwards, and they will very likely follow inflation downwards.

And if the rates DON’T go down in the near future, that’s because inflation has continued to go up, and your home is increasing in value anyway. It’s a win-win scenario.

 

#6 Hedge funds are still on a buying rampage for a reason.

Why are BlackRock and other big corporations on a buying spree? It’s because they know that it’s still a great time to enter the market. Here’s what they’re looking at…

Real Interest Rate = Nominal Interest Rate – Inflation

When nominal interest rate (ie: the rate you pay on your mortgage) was 3% and inflation was 2%, the real interest rate was 1%.

3% Nominal Rate – 2% Inflation = 1% Real Interest Rate

When nominal interest rate is 5.5% and inflation is 8.5%, the real interest rate is negative 3%.

5.5% Nominal Rate – 8.5% Inflation = -3% Real Interest Rate

That’s why Black Rock are buying everything they can! And just like you, when the nominal rate drops, they’ll refi.

 

#7 “But the real estate crash is coming, just like in 2008.” FALSE!

I hear this a lot lately, “I’m going to wait for the real estate crash before I buy.”

People are incorrectly assuming that a crash is coming, and they point to the 2008 recession as proof. But here’s the thing…

Correlation is not causation. In 2008, the real estate crash CAUSED the recession, not the other way around. The economy did not crash the real estate market.

The economic situation today in 2022 is very different from 2008. Currently we are dealing with very high inflation, a housing shortage, supply chain issues that are causing slow housing development, and homeowners who either recently bought or refinanced at sub-3% mortgage rates and aren’t looking to sell anytime soon.

Quite the opposite from 14 years ago when adjustable rate mortgages and a housing bubble caused hundreds of thousands of homeowners to lose their homes, resulting in a tremendous housing surplus.

Comparing the two scenarios and waiting for a crash is foolish. Historically during recessions, other than in 2008, real estate prices have gone up.

 

So what should I do?

Now is your opportunity to BUY SMART! Leverage your negotiating power as a buyer and make offers that are commensurate with market conditions.

However before you start submitting offers, contact us to discuss today’s best mortgage options so that you can come to the negotiation table fully armed with all the information needed to make a strategic deal.

We’ll find you a mortgage with no points, no fees, and short refi windows so that you’ll be prepared to lock in a great price on a home today and reserve the ability to refi in the future — the best of both worlds.

 

◦ MEET CHRIS MASON ◦
Chris Mason, loan officer at America’s Home Loans, has built a solid local reputation helping first time homebuyers, refinancers, and real estate investors obtain optimal and fast mortgage financing to help them accomplish their goals .

He prides himself on offering unparalleled support and treating every client like an INDIVIDUAL and not a NUMBER.

Chris joined the Marines at the age of 17 where he then served over eight years, including as an infantryman in the First Battle of Fallujah. He retired as a Sergeant of Marines and then attended U.C. Berkeley where he graduated with honors with a degree in Business Administration. From there, Chris started his career in the mortgage industry working for larger lending institutions. He opened the El Cerrito branch of America’s Home Loans in 2014 so that he could provide the type of client service he felt was missing from bigger lending institutions.

Chris believes in the American Dream and derives great satisfaction from putting first-time homebuyer families into their first homes and first time investors on a pathway towards financial freedom.

Chris Mason, Loan Officer
NMLS 1220177 | CA DRE 02080854
[email protected]com
(415) 846-9211
Schedule A Call

Ready for the best mortgage experience of your life?

Click below to schedule a free 15 minute consultation or call (415) 846-9211.

WAIT! Before you go...

If you were unable to find the information you were looking for on our website, give us the opportunity to answer all your mortgage questions with a Free 15 Minute Phone Consultation