It’s hard to believe we are in June already!! When we started writing this brief newsletter on Friday, we were going to state that we were hopeful for a peaceful summer for all…well that lasted until Saturday night in London… I suppose the terrorists don’t really care what we think. Back to more mundane matters – the economy, interest rates and real estate. Friday’s employment report was tepid at best and with prior month revisions, interest rates headed to their lowest level since the beginning of the year. Is this a window of opportunity or an overall downward trend remains to be seen. Both equity prices and real estate prices keep moving up as well. Once again, is this the trend that will keep going or are we near the upper boundary lines of a valuation cycle? These are the large macro questions that only time will give us the answer to.
Our recommendation as it relates to the mortgage arena, is to allow Centek to evaluate your existing mortgage profile and analyze if any alternative programs would be better suited for your overall financial strategy – reducing the amortization of your current loan, changing from an adjustable rate mortgage to a fixed rate or conversely changing from a fixed rate mortgage to an adjustable rate program. Mortgage rates have dipped below 4% and if rates continue down this path, our steadfast philosophy is to have your loan package in and ready to go in order to best take advantage of a further rate decline. If we start the process further down the line, we might not be able to catch the window of opportunity.
In regard to the real estate market, we feel the most prevalent issue is with the lack of inventory for sale. The lack of inventory is due to several interrelated factors that we have not recently experienced. The escalation of property prices in our California market (especially our SoCal & Bay areas),the vibrant California economy & the increases in the stock market. The combination of these and other factors including the demand from foreign investors, has limited the number of available properties on the market. The flip side to this equation is where is the seller of the property going to move? This point is a large reason as to why more properties are not for sale. Where does one move when they sell their home? This is a problem and a main reason why with elevated home values more properties are not on the market. The move up buyer is difficulty in selling their existing house and being able to afford the next level up in price….This by no means applies to everyone, but is a major point in the overall real estate market place.
Please feel free to contact us to discuss your financing or overall real estate acquisition or sales needs. We can review and strategize with you.
Gloria Shulman & Curtis Cohen