Archive for August, 2012

Why use FHA financing?

Friday, August 24th, 2012

As we watch the volatility in the financial market and the impact that it could have on mortgage rates now and in the future one should consider what the impact will be when trying to resell their home in the future. If interest rates stay the same for an indefinite period of time then there should be now issue as to what type of financing you use, but if interest rates in the future go back up to where they should be or where they have been historically you may have a really hard time selling your home. Most home buyers qualify for their homes based on how much they can afford on a monthly basis. If you purchase a home today with a 3.5% interest rate and if 5 years from now the rate is 7% it will require almost twice as much available money to pay for the same amount of money borrowed. If you purchase a home today for $200,000. at the current interest rates, you would have a base payment of around $700.00 per month. If the interest rate were 7% that payment would almost double. This would make your home much harder to sell because the buyers would be required to have a larger down payment or much more income to qualify to purchase your home. If you have an FHA loan that can be assumed then you would be able to find a qualified purchaser who could take advantage or your great interest rate by assuming your loan. Most FHA loans are assumable. This would not only make your home easier to sell, but it would make it more desirable increasing what you could sell it for. Just a little food for thought before you jump into a mortgage which may or won’t be assumable. A good question to ask before you get your next loan on a home.

St. George, Utah Real Estate Market Update

Wednesday, August 15th, 2012

I just wanted to get an update out to all those who follow this blog.  The market in our area has really picked up in the last few months.  The inventory of homes is shrinking and prices are starting to increase.  The increase in the last year in the greater St. George area has been almost 17%.  If you compare June of 2011 to June of 2012.  We have had a steady increase in sales so far in 2012 and prices continue to go up.  There are still some good deals to be had in the market, but most of them are in the $400,000 + price range.  There is about a 2 months supply of homes in the $150,000 to $250,000. price range.  There are about 220 single family homes in that price range currently on the market.   There are still some good deals on rental properties for investors if they are looking for condo’s or town homes that will actually give them a cap rate of over 5%.  There are some properties that will even do better than that if you know where to look for them.  Land prices are also on the increase and have gone up about 30% in the past year.  In some areas they have gone up less and other areas they have increased even more.  The outlying areas are where the great deals can still be found, but even in these areas things are really starting to pick up.  I predicted about a year and a half ago that when our market changed and started improving that prices would go up at least 10% in the first year.  I must admit that I was a little to conservative in my estimate.  That is good if you are selling or own a property, not so good if you are looking to purchase a property.  Interest rates are still very low and so even with the increase in price housing is still very affordable.  There is a lot of new construction going on in the area as people are starting to build, because they can’t find exactly what they want on the market.  Inventory will continue to shrink for the next year or so as prices continue to rise.  Those people who have been sitting on the fence should have gotten off the fence and purchased a property, because now it will cost them more than it would have a year ago.  Those who are trying to find a nice home under $200,000. had better hurry up and act before they all disappear.  Many people have said to me that they have heard that it is hard to get a loan.  I have not had problems with getting loans done for my buyers.  If you have a good credit score and some down payment money, loans are available and at great rates.  I still see people trying to negotiate great deals on properties and missing out on them because they are not aware of what is going on in the market place.  There are still good deals to be had, but the killer deals are dead.  Even the bank owned homes have increased dramatically in the past few months.  They are no longer fire selling the homes they have on the market.  I hope this has helped some of those who are still sitting on the fence deciding what you want to do, if not then just keep waiting and you will find out the hard way that this isn’t just written to scare people into buying.  This is just an update on what is really happening in the St. George, Utah real estate market.  If you have questions or need more information please feel free to contact me.

Market summary report june 2012