‘The Wild, Wild West’: Turlock Realtor intervenes on booming real estate market

The current housing market in California – and across the country – can only be described as a binge eating, homes on the market are selling faster than they can be listed.

Is it a good time to buy? Is it a good time to sell? A local real estate agent says it’s a good time to do both – as long as you’re smart with your investment. With interest rates at historically low levels and house prices at an all time high, Atlantic Realty’s Michael Rocha said those looking to do either should keep interest in mind. long-term care of their family.

“It’s the Wild, Wild West out there right now when it comes to the housing market,” Rocha said. “There is so much demand and there is not enough supply.”

Historically low interest rates brought on by the coronavirus pandemic are causing homebuyers to circle properties like sharks in the water. Before COVID, interest rates were approaching 4%, Rocha said, and now buyers can be approved at rates as low as 2.5%. Those who could have afforded a $ 300,000 home last March can now afford $ 350,000 this year, pushing up house prices and leading to bidding wars where the buyer with the most money. pockets wins.

“Last year, when you bid on a house, you were going $ 5,000 or maybe $ 10,000 above the asking price if you really wanted to. It would put you in a good position to get the house, ”Rocha said. “Now people write offers that are $ 35,000 and $ 40,000 above asking price and still don’t see their offers accepted because there is someone bidding even more.”

Rocha has five years of experience in the real estate industry, but has spoken to agents with decades of wisdom under their belt who say they have never seen anything like the current state of the housing market. In his early days, Rocha could sell a starting home in Hilmar for around $ 230,000. Today those same homes sell for $ 400,000.

The end result is that first-time home buyers are left out of the equation, he said, with many eligible buyers paying tens of thousands of dollars more than what a home is valued at.

“A lot of these first-time home buyers can’t keep up,” Rocha said. “They put their savings into a down payment and closing costs for a house, and then they run out of money for the rainy days.”

In a normal market, a seller would receive two or three offers on their home in their first few days of listing. Homes that are coming onto the market now are bombarded with nine or 10 offers in the first week, Rocha said. Even though homes sell for much higher prices than they are actually worth, low interest rates can make a purchase worthwhile as long as a buyer doesn’t plan to sell anytime soon – because at at some point, the market will correct itself and the value will come down.

It’s just a question of “when?”

The housing market was heading for a crash before the pandemic according to Rocha, and when rates were cut over the past 12 months, it allowed the bubble to expand.

“I don’t feel like we’re going to see a big stock market crash, but rather some kind of correction. Sooner or later people will not be able to move forward with houses here in the valley. They are going to get way too expensive, and we don’t have the jobs here to justify the values ​​that are going to come, ”he said.

Rocha said he and other officers noticed a lot of people moving inland into the valley from the Bay Area, with some paying $ 50,000 above the asking price of a house and in cash – adding gasoline to the already chaotic fire. Whether it’s a stock market plunge or something else, Rocha believes a correction is coming and is being highlighted by leading figures like Elon Musk and others unloading the real estate properties they currently own and sell them for high prices while they can.

The market is a seller’s dream right now, he added, with those who are selling their homes at high prices able to go on and deposit a considerable amount of money on a low rate home. interest.

“Then with the money they have left, they can live debt free other than their mortgage,” Rocha said.

It’s a great place for sellers, but a tough time to be a buyer. Most people looking for accommodation are currently seeing their offers turned down house after house. But, Rocha added, if you can find a home you love and will be living in for years to come, then current interest rates might be worth it as house prices stabilize over the course of the year. next year.

Rocha bought a home himself during this crazy market time and had some tips for those looking to do the same.

“Don’t buy anything that you want to rent or sell in the next two or three years because if the market corrects you want to be stuck in a house, you’re happy to be stuck. If you’re a seller and you’ve always wanted to get that bigger house, now is the time to do it, ”he said.

“Be smart with what you invest in. I bought in the last six months and wouldn’t have done it if it wasn’t the right home. It suits me now and in the future, and if a home is right for you now and fits your family’s future goals, then go for it.

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Gloria Turner

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