Despite a sluggish economy
– especially where job creation is concerned – the real estate
bubble seemingly refuses to burst.
Despite a sluggish economy – especially where job creation is concerned – the real estate bubble seemingly refuses to burst.
Hollister is in a true seller’s market – previously, a phenomenon approaching an urban myth in Realtor circles because it’s so rare. Houses are on the market for 64 days on average. A year ago, it was 120 days. People are fleeing high prices in the Bay Area to find more affordable housing. As a result, home prices in the area are on the rise. The median price for a Hollister home is $467,000. Homes in Gilroy and Morgan Hill jumped 20 percent in value in a year. Buying a home in the area is one of the best places to invest money. It sure beats the stock market over the last few years.
The renewed multiple-purchase-offer climate has all the earmarks of a frenzy – think the dot-com or Dutch tulip frenzies – and the very real possibility that prices will come back to earth should be front and center in the minds of anyone thinking of buying or selling a Silicon Valley home. Low interest rates, which make it possible for people to afford bigger homes and bigger mortgages, are an important force driving the current real estate market. One word from Alan Greenspan on interest rates has the potential to quickly chill the area’s real estate fever.
While homeowners and Realtors love the situation, rising prices and high demand make things difficult for those who’ve yet to buy a home in our area. High prices, also being fueled by low supply, make it hard for first-time and lower-income buyers to break into the market.
Without a hefty paycheck – it takes an annual income of more than $91,000 to afford a median-priced California home – and a nest egg from selling a Silicon Valley home, buying a home in our community is a pipe dream for many people.
That’s why the efforts of groups supporting first-time and lower-income home buyers are so important. Programs are offered through the California Housing Finance Agency.
If you’re dreaming of owning your own home, don’t give up. Talk to a mortgage broker who specializes in first-time home buyers, visit with a real estate agent who is familiar with programs for lower-income buyers and work to create a great credit record. Most of all, be patient.
A small spike in interest rates, which some predict will happen in the next few months, could cool the market significantly. And even if mortgage rates do rise, we’ll still be enjoying the lowest interest rates in years.
