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Real estate from the trenches: Investors vs first time homebuyers
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Recently I have gone back to work selling real estate full time in the San Francisco Bay Area. The company The market in the East Bay, where my is located, is smoking hot. Low priced REO and short sale properties have created a buying frenzy in the Bay Area.
All of the Bay Area is affordable compared to just one year ago.
Prices in Oakland, Richmond, El Sobrante, Emeryville, Berkeley, Albany, San Leandro, Hayward, and all points east are very, very, affordable compared to last year’s prices. Many properties are being put onto the market in the East Bay well below $100,000.00.
Money is also very inexpensive. Interest rates are at an all time low and the lending restrictions have eased up a bit. Most people looking to get a loan will now have to pay PMI but with the prices and interest rates low monthly payments also are low. Most potential loan applicants are finding that a mortgage for a home below $150,000.00 is less than what they currently are paying in rent.
Investors, looking for single and multi-family properties needing TLC, are furiously buying up REO properties, usually buying with cash.
Investors realize that the rental market will stay strong, or get stronger, as more and more people face foreclosure in the coming years. They have the cash and are willing to spend it to get the income stream that comes from owning rental properties.
First time homebuyers, many realizing that they now can afford to buy in the Bay Area, are scrambling to buy.
Consumer confidence is much higher than it was last year. Properties priced below $100,000.00, not as common as they were three months ago, are being snapped up as investors and first time homebuyers scramble to take advantage of opportunities.
There is intense competition between the two camps and surprisingly the first time homebuyers are winning.
First timers, armed with pre-approval letters for $150,000-200,000.00, are bidding up properties priced below $100,000.00. Investors, beginning to realize that pickings are getting slim, have begun to adjust their expectations. The battle is on.
Want to know where the best deals on homes are in the Bay Area? Want to know how a short sale can benefit a homeowner facing foreclosure? Have a question about loan modifications? Want to know how to buy REO properties?
I love answering reader’s questions. Send an email with your real estate, loan, loan modification, or foreclosure questions to americaf@mariojuarez.com. I will either answer in a future column or contact you directly with more information. Thanks again for your questions.
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