Friday, December 01, 2006

Buyers: "It's the Price, Stupid!"

From the Stockton Record:
With all the talk of a slow housing market, there really hasn't seemed to be much notice of a steady decline in interest rates since midsummer. New-home builders and real estate brokers say they're glad to see the interest rates down - the national average for a 30-year fixed loan stood at 6.14 percent Thursday, down from a high this year of 6.8 percent in July.

But those historically low rates don't seem to be helping much with sales, they said, because the overriding concern of home buyers seems to be getting the most value for the dollar in a market with hyper competition among sellers and sliding prices.

"They're looking primarily at price," said Beverly Marlow, owner/broker for Marlow Realty in Manteca. "That's not to say they're not looking at interest rates, but first and foremost, they look at price."

Home buyers have watched the market enough to know about the home-price escalation of the past several years, Marlow said, and they wonder whether they'll see prices continue to drop. They don't want to buy now, then see the value of their home actually drop in coming months.

Terri Milton, chief executive officer of Keller Williams Realty Central Valley in Stockton, said interest rates were expected to rise this year to about 7 percent by August. So it's good news that much lower rates are available to buyers, she said, but added, "everybody's been fixated on the market falling. They're focused on the price."
Meanwhile, the median sales price for new and existing homes and condominiums in San Joaquin County stood at $420,000 in October, down 2.21 percent from $429,500 the previous October, according to the real estate research firm DataQuick Information Systems in La Jolla.


Merced "Going Quickly" said...

I like the new layout.

Anonymous said...

From conversations I have ahd with mortgage folks, the rates don't matter much. What was getting people into the market was the interest only, no-doc, liar loan type products. According a loan-industry person I know, everything they were doing was a liar loan with 0% down. By the time you moved in, you could just refi out of the 2nd mortgage and you were fine. Why put any money down? Now you are either trapped in a toxic mortgage and people aren't getting into these things. Most first time buyer can not afford a 600,000 mortgage (or 400,000 for that matter).