Summer is upon us with all that it has to offer! Most of us would rather be experiencing summer activities rather then the reality of dealing with health, work, money , family etc.. That being said, the stock market continues to churn higher to record levels along with real estate values. Interest rates seem to have found a middle ground waiting for the Federal Reserve decision….What appears to be the driving force with the direction of rates is coming from Germany. Their rates have risen quite a bit and now seem to be leading the interest rate complex to higher levels. We will see what our Federal Reserve Board determines soon.
Our recommendation as it relates to the mortgage arena, is to allow Centek to evaluate your existing mortgage profile and analyze any programs that might be better suited for one’s overall financial strategy – reducing the amortization of one’s 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 one’s loan package in and ready to go in order to best take advantage of any further rate decline. If we start the process further down the line, we might not be able to catch the window of opportunity. Another segment of the financing arena which we are experiencing more and more issues with, is the student loan situation. Many of our younger clients are having difficulty qualifying for their first home loan because of the student debt load (even if deferred). Our suggestion to many clients is, if possible, to assist with their children’s home purchase by either co-signing on the loan for them or refinancing their home’s in order to pull out cash to pay off the student loans. These are difficult decisions for all parties on a multitude of fronts, but certainly worth considering.
In regard to the real estate market, we feel the most prevalent issue is with the lack of inventory for sale. This lack of inventory is due to several interrelated factors that we have not experienced in the recent past. The escalation of property prices in our California market (especially our So Cal & Bay areas),the vibrant California economy & the increases in the stock market in addition to the inherited wealth effect. 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 is going to move to? This concept is a major 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 major reason why with elevated home values, more properties are not on the market. Many move up buyers have constraints 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. Stay tuned!
Gloria Shulman & Curtis Cohen