If you are wondering if it's a good time to buy real estate, the answer is yes, and it will continue to be throughout this year.
Market conditions and mortgage rates make this an excellent time to purchase a home. Every city in North County has seen some level of price decline since the height of the real estate market in 2005.
Most who are selling in this market are sellers who have to sell, such as banks with foreclosures, divorcees, relocations or financial hardship cases. With less buyers competing for homes, homebuyers have an opportunity to shop with less pressure and get a better deal.
In addition, mortgage rates remain around 5.75 percent for a conforming loan amount. The numbers are showing people have come out to buy this spring. As of April 13, 168 homes and condominiums were under contract, or sold after March 1.
The hottest sector of homes in Carlsbad is the more slightly conservative home choice: three to four bedroom, 2,100 square feet and around $750,000. However, the luxury market has not experienced the same heat.
Luxury market hardships
Carlsbad's luxury market is going through growing pains. There are approximately 500 single family homes for sale in Carlsbad. Forty percent of homes for sale are priced at more than $1 million; an above average number in Carlsbad. Of those, 80 percent were built after 2003.
Many of the recent new home developments in Carlsbad pushed thousands of large, million dollar homes into the local market. La Costa Oaks, La Costa Greens and La Costa Ridge featured 3,000-square-foot and larger homes catering to the strong demand for more expensive housing. The real estate and lending market has changed since these developments were built in 2003.
The numbers are showing that people are buying less expensive homes. Seventy-seven percent of all homes under contract or sold this year were under $850,000. Currently, a jumbo mortgage is almost 1.4 percent higher than a conforming loan at 7.1 percent. A year ago, the difference between a conforming and jumbo loan was negligible, encouraging buyers to stretch a little to afford the larger home.
With data showing an oversupply of $1 million to $1.7 million homes on the market, those wanting to sell their property must be patient. Market time is likely to increase and prices may trend downward for luxury homes as there are more for sale and less million dollar buyers.
Investment in real estate
Investment buying in real estate is back with the help of foreclosure properties. Recent sales in Oceanside (92056 and 92057) for a 1,700-square-foot, three or more bedroom property were around $350,000. Those same properties were selling for as much as $550,000 in 2005.
The new market price for homes is being set by foreclosure homes owned by Wells Fargo, IndyMac Bank and Countrywide. Holding onto property is expensive, so the banks drop the price to quickly unload the foreclosed homes. Much of the falling prices in the Oceanside area can be attributed to the higher number of foreclosures, which to some extent Carlsbad has avoided.
The new prices are excellent news for those who see the value in owning property as an investment. A new foreclosure home in Oceanside that recently listed was a four bedroom, 2,100-square-foot home in a planned neighborhood for $336,000. A four bedroom home of this quality would rent for $2,000 to $2,200 a month. If an investor purchased the home at full price, he or she would see a 4 percent to 7 percent return on 20 percent down money, including property taxes, insurance and a 6.25 percent rate on the loan balance.
If you are in the market to purchase a home, you should be excited about the current market because of the combination of low mortgage rates, 40 percent off 2005 market high prices and sellers' willingness to make a deal. Next month's column will cover strategies to sell despite the current market trends and how the local market is expected to fare over the next year.
Market conditions and mortgage rates make this an excellent time to purchase a home. Every city in North County has seen some level of price decline since the height of the real estate market in 2005.
Most who are selling in this market are sellers who have to sell, such as banks with foreclosures, divorcees, relocations or financial hardship cases. With less buyers competing for homes, homebuyers have an opportunity to shop with less pressure and get a better deal.
In addition, mortgage rates remain around 5.75 percent for a conforming loan amount. The numbers are showing people have come out to buy this spring. As of April 13, 168 homes and condominiums were under contract, or sold after March 1.
The hottest sector of homes in Carlsbad is the more slightly conservative home choice: three to four bedroom, 2,100 square feet and around $750,000. However, the luxury market has not experienced the same heat.
Luxury market hardships
Carlsbad's luxury market is going through growing pains. There are approximately 500 single family homes for sale in Carlsbad. Forty percent of homes for sale are priced at more than $1 million; an above average number in Carlsbad. Of those, 80 percent were built after 2003.
Many of the recent new home developments in Carlsbad pushed thousands of large, million dollar homes into the local market. La Costa Oaks, La Costa Greens and La Costa Ridge featured 3,000-square-foot and larger homes catering to the strong demand for more expensive housing. The real estate and lending market has changed since these developments were built in 2003.
The numbers are showing that people are buying less expensive homes. Seventy-seven percent of all homes under contract or sold this year were under $850,000. Currently, a jumbo mortgage is almost 1.4 percent higher than a conforming loan at 7.1 percent. A year ago, the difference between a conforming and jumbo loan was negligible, encouraging buyers to stretch a little to afford the larger home.
With data showing an oversupply of $1 million to $1.7 million homes on the market, those wanting to sell their property must be patient. Market time is likely to increase and prices may trend downward for luxury homes as there are more for sale and less million dollar buyers.
Investment in real estate
Investment buying in real estate is back with the help of foreclosure properties. Recent sales in Oceanside (92056 and 92057) for a 1,700-square-foot, three or more bedroom property were around $350,000. Those same properties were selling for as much as $550,000 in 2005.
The new market price for homes is being set by foreclosure homes owned by Wells Fargo, IndyMac Bank and Countrywide. Holding onto property is expensive, so the banks drop the price to quickly unload the foreclosed homes. Much of the falling prices in the Oceanside area can be attributed to the higher number of foreclosures, which to some extent Carlsbad has avoided.
The new prices are excellent news for those who see the value in owning property as an investment. A new foreclosure home in Oceanside that recently listed was a four bedroom, 2,100-square-foot home in a planned neighborhood for $336,000. A four bedroom home of this quality would rent for $2,000 to $2,200 a month. If an investor purchased the home at full price, he or she would see a 4 percent to 7 percent return on 20 percent down money, including property taxes, insurance and a 6.25 percent rate on the loan balance.
If you are in the market to purchase a home, you should be excited about the current market because of the combination of low mortgage rates, 40 percent off 2005 market high prices and sellers' willingness to make a deal. Next month's column will cover strategies to sell despite the current market trends and how the local market is expected to fare over the next year.