Low Interest rates of 4.25% begin to bring more buyers into the market?

     The interest rates are the lowest they have been since the 1950’s  having hit 4.25%  in the last couple of weeks.  This is causing people who have been sitting on the sidelines to again think about buying as a primary residence or second home.  Prices have actually been fairly steady with a slight downtrend in the last year for the better properties.  More if the properties needed some work.

    This means if you borrow 100k your principle and interest are $491.94  per month.  You would add taxes and condo fees to this and you will get an idea of the total note.  Do not forget the value of the tax deduction for interest.  Do not forget in year one you actually reduce the principle by $1686 and this figures grows each month.

      Second homes get this low rate as long as you have only one second home.  There are no third homes as it then becomes investment property at a much higher rate.   Second homes will require 20% down in all most all cases.  You avoid PMI  with 20% down and this is a huge savings.

    Buying a condo as primary residence would mean putting 10% down.  You can ask the seller to pay the majority of the closing cost if you want to preserve cash.  This is more and more common in all transactions.  

    Two bedroom units have been the strength of the market year to date.  I do see the one bedrooms making a comeback with the low rates in the very near future.  These are the units that are currently some of the best buys.  These are going to be your first time buyers and second home people that do not need a lot of room.   Many sellers have had their units on the market all Summer and are ready to make a deal as the seasons change. 

    Condos that need updating are still out of favor as prices have not been adjusted for the things that need to be done.  The majority of the sales have been in the premium units.  Meaning you buy and almost nothing needs to be done except you own taste. 

      Sellers may be better to make their condos into premium units rather than reducing the price.  This is working for me.  Get all the things done before putting it on the market.  Today’s market is a beauty contest with only best looking units winning the sales.  The buyers today are very stern judges.

     I have seen some of the nicer things having been sold in the last couple of weeks.  They were their one day and gone the next.  There are several good buys that I have seen and bet those will begin to vanish as well.  The good news about the oil spill being capped is good news for everybody  and the real estate market.  Psychology of markets works like a clock as fewer people buy at the bottom but now may be the bottom. 

Bird of Paradise by Pool 

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Eric Bouler Realtor
Gardner Realtors
Metairie - New Orleans, La. USA