Earlier this week I attended our brokerage’s monthly meeting. We usually hold these meetings at one of our strategic partner’s office. This month it was held at Suburban Mortgage.  I won’t bore you with the general rhetoric of our meetings but what I did find very interesting were comments given to us by Tom Osselaer, Executive Vice President of Finance for Suburban.  Tom is a follower of the market, especially of the financial markets and how they relate to the real estate lending world.

Here are a few of his comments that I found interesting.

1. When asked about where he thought interest rates were going? His answer was, they will be going up and down or they will be going down and up. Meaning nobody knows. So stop being obsessed with hitting the exact bottom because by the time you realize it’s bottomed it will be too late. A bigger concern is if you could qualify today at these interest rates, will you qualify when interest rates go up?  Maybe that uptick will prevent you from getting a loan. Today’s interest rates are still very low at 5-6%. How many of us remember when interest rates were approaching 20%?
2. Jumbo loan funding (over $417K) is improving. In the fall of 2008, during the financial meltdown these loans were impossible to get. Without the Federal government backing these loans, they couldn’t be sold on the secondary market, now they are. This is a very positive improving sign.
3. Even though the Phoenix area has seen its share of unemployment, there is still this attitude around the country of “Go West Young Man (or Woman)”. Besides, where would you like to be unemployed…Phoenix or Detroit?   
4. The Phoenix market has always been cyclical. It will rebound faster because of the natural inbound migration.
5. Housing affordability ratio hasn’t been this good in over 20 yrs. If you add in the Home Buying Tax Credit of $8000/$6500 it improves the ratio even more.
6. Individual’s home buying decision should NOT be a short term decision. Think long term. If the home price goes down for the 1^st few months you are in it, so what? You are not selling after living in it only a few months. Where do you think the housing market will be in 3-5 yrs? Financial planner’s usually advice putting away (investing) consistently every month for your retirement. A mortgage payment is exactly that. Again, think long term.

When I meet my clients for the 1^st time I ask;

1. Where do you want to live?
2. Can you afford it?
3. Are you comfortable with the payment?

Do you want to take advantage of low interest rates, a government incentive, great affordability and home selection?  If you haven’t already and you want to search on Phoenix area homes go to www.Steve.ViewAllPhoenixHomes.com

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