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Lisa Casiano, Real Estate Pro in Huntington Beach, CA

Why are there still renters not buying in this low rate market?

Asked by Lisa Casiano, Huntington Beach, CA Tue Feb 7, 2012

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Lisa,

The real estate activity in our market seems to be increasing and more buyers are looking for a home to buy. Buyers are realizing that the affordable home prices and low interest rates make this a great time to buy a home.

Today’s buyer is often able to buy a home less than rental prices. Low payments gives assurance to buyers that if something happens and they can’t make the mortgage payment, they can always rent the home. We need to get the message out that this is a great time to invest in real estate.

Thanks,
Carol Perdew
Prudential California Realty
(209) 239-7979
Carol@PerdewHomes.com
http://www.CentralValleyHomes.com
DRE 985176
0 votes Thank Flag Link Wed Feb 8, 2012
There does seem to be some very strong inertia at work there. Higher employment would certainly help. There are still people sharing housing. The potential is there. But, those rates don't pay for themselves. The economy needs a few more jobs. Higher paying jobs would be preferred.

The economy has moved back from the cliff. But give people a little while to recompose themselves and get back to doing the things they do when the world doesn't seem in crisis. Business people and workers can get back to the business of expanding business and maybe hire a few.

Seasonal buying is just around the corner. I think it is going to be a good year.

SuZ
0 votes Thank Flag Link Tue Feb 7, 2012
If you're not busy then you need to think about how you're thinking about and speaking about the market. We're supposed to be the professionals, it's up to us to educate those we come in contact with so that they realize that in most markets it actually still makes more sense to buy than rent, even if your pessimistic about the mid term prospects in your local market..

I've attached a link to a piece I posted here on Trulia not all that long ago. It's been one of my popular posts in the past 90 days and I've picked up over half a dozen buyers in my market directly related to their having read it and then spoken with me. What people seem to like is having the numbers clearly laid out for them so it's easier to grasp.

This is just one example, what every agent needs to do when their not as busy as they want is to take the time to focus, set a realistic goal and then take the action necessary to achieve it. Use the laws of entropy to your advantage, “A Body in Motion Tends to Stay in Motion”

You could use the same format I present here and tweak it to fit your local market, the numbers will be different but my guess is the end result will be the same, that it often makes more sense to buy then rent particularly given the lower market prices coupled with the lowest interest rates in my lifetime. PS be sure to check out part II where after enough requests I took all the written material and condensed it into a simple spreadsheet.

http://www.trulia.com/blog/LarryTollen/2011/11/2012_buy_a_ho…

Think positive, be positive and go get busy.
0 votes Thank Flag Link Tue Feb 7, 2012
Hi, I find that some buyers are still fearful of the job market.

Chris
0 votes Thank Flag Link Tue Feb 7, 2012
Hi Lisa,

I would have to concur with David and infuse fear as one of the factors why renters are hesitant to buy given the most ideal and favorable conditions which should be taken advantage of: the historical low mortgage interest rates and the pool of move-in-ready homes at low prices. With the two factors added into a formula for a fully-amortized monthly payment including the taxes, PMI and homeowner's insurance, the mortgage payment can be less then the rent.

And even if the mortgage payment is slightly higher or higher by a couple hundred dollars, the tax benefits will offset the difference.

My second reason would be "the renters do not have a clue on how to start the process." And this is unfortunate for the qualified buyers who has no idea that she/he is on her/his merry way to home ownership.
0 votes Thank Flag Link Tue Feb 7, 2012
Fear, buyers are afraid when their is nothing to be afraid of. You can buy a home almost anywhere in the Country for less then you pay in rent. FHA at just 3.5 % down still accommodates most first time home buyers.
We will never, ever see 3.75% interest again in our lifetimes. Talk to everyone, get out and hand deliver 50 flyers around every open house. When you get a buyer send out 100 post cards in the area that buyer wants to live.
You will start a steady stream of leads. You must make a financial and an emotional investment.
Dave Page
Edmonds realty
Edmonds Wa
0 votes Thank Flag Link Tue Feb 7, 2012
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