The California housing market is hot, and people across the country are always clamoring to move to the sunshine state. That’s precisely what makes competition a bit heavy and often times bidding wars ensue. Outside of New York, California is known as one of the priciest areas to buy real estate in the country. It’s often said that you are paying for the weather. In reality, you are paying for the weather, the ocean, the beach, the mountains, Hollywood, wine country, and many more things I don’t have time to list. There are quite a few reasons why today is the perfect time to purchase your first house in California!
The housing meltdown hit the entire country, and probably California the hardest. If only we had a crystal ball back then to see how the market was going to drastically improve so quickly. Now we know the market bounced back blazingly fast, and the prices are still far below the peak of the mid-2000’s. You can’t quite snag the deals that were available a couple years ago, but rest assured the market is going to continue to rise and pricing will only get higher. Just remember, the closer you get to the ocean the more the housing will cost. So if you are looking for something a bit more affordable then you should probably look further inland.
First time homebuyers are usually the ones that have a difficult time buying a house. The reason is that they don’t have the benefit of home equity from selling a previous home, which is usually what current homeowners benefit from when transitioning houses. The California Housing Financing Agency (CalHFA) has recognized this hardship and instituted a new program. The CalPLUS Conventional Loan with Zip Extra is designed to help first time home buyers with down payment assistance. This program allows you to receive 3% of the purchase price plus an additional $6,500 as upfront monies to use as down payment assistance or for closing costs. The loan program promotes responsible lending, as such it comes with some contingencies. For example, only borrowers with minimum credit scores ranging from 640 to 680 are eligible, you are required to purchase a first year home warranty, and attend a first time buyers educational course so that you know what to expect when owning a home. To apply for the loan, please contact a CalHFA preferred loan officer that can answer all of your questions, or call CalHFA directly at 877.9.CALHFA to ask about the loan. They have also provided a helpful video that can answer a lot of your questions as well.
Interests are another great reason why now is the time to buy. We are probably about a year off from the all time lowest historic rates. That doesn’t mean that the rates available today are all that bad. Today you can take advantage of fantastic rates with the security of knowing that the housing market, and the economy as a whole, is on the rebound. The generation before us were used to paying double digit interest rates on housing, making our price ranges virtually unaffordable for just about everyone back then. The most important thing to understand is that the interest rates have nowhere to go but up now. Nobody can predict interest rates, but I can safely say that aren’t going to get any lower than they are now. Consider what it took for interest rates to get to all time lows. We had to experience a financial meltdown, severe recession, and a burst housing bubble the likes of which this country had never seen before. Trust me, we don’t want to experience lower interest rates than we have now.
The housing supply is finally starting to open up. The past couple years, if we wanted to take advantage of rock bottom home prices and historically low interest rates, then we were forced to settle on a house. There were so few on the market because current homeowners were typically underwater on their mortgages and couldn’t afford to sell. Now the market is becoming much more robust with several more options available. You actually have the chance of finding your dream home in today’s market, there is no need to settle, and interest rates are still there for the taking.
Last, and certainly not least, the economy is generally more stable than it has been in nearly a decade. Unemployment is starting to creep back to normalcy, and job creation in general is starting to grow. This is usually the best sign for the housing market because people need jobs and stability in order to buy a house! Consumer confidence is actually at all time highs and the GDP is growing at a steady and healthy rate. These are the economic indicators that are most important to a growing real estate market.