Real Estate Forecast

REAL ESTATE IN 2013

 

Mortgage Interest Rates Rates are low (4% and less today) and should remain low. As the economy and housing markets improve, mortgage rates will begin to creep up, we are starting to see that already as the Tulsa market improves.   Buyers Market – For Now 1) There us a good suppl of homes for sale right now, but inventory levels are low; 2) many sellers’ prices are “soft”; and 3) mortgage rates are low but bringing tougher qualifying and closing guidelines. These make it a very favorable market for good, bona fide buyers. But It Won’t Last The “better” home buys are being absorbed quickly. The number of “short sales” and foreclosures is declining. Those facts plus  stricter loan qualification will cause current market values to increase and swing back to favor the seller. Rentals If one can purchase a property for rental investment, now is an ideal time to seriously look into it. Why? Consider these points:
  1.      Rental demand is strong and should remain strong for some years ahead. This will increase a good rental income.
  2.      Housing prices and mortgage rates are both low – at the same time! This creates great investor opportunities. I have been telling investors this is better than the stock market because you can get an investment house with only 20% down.
Example A 3 bedroom/2 bath/2 car garage home priced at $125,000 (approximate median price in the Tulsa area), should rent for $700-$900 per month. A $25,000 down payment will leave a mortgage of $100,000 with a possible 4% – 30 year amortization payment of $478/month. Add taxes, insurance, maintenance, etc. and total estimated monthly costs should be $650 – $700. Direct expenses can be deducted on income tax computations plus approx $4,000 in depreciation. It may be worthy to compare a rental real estate investment to stocks or other portfolios of investments. The Economy Will Improve Many experts predict the economy will improve in spite of itself, even with the non “business friendly” legal/regulatory framework that exists today. Also, during 2013,  the economy will be foremost in the minds of politicians.   Contact me when you are ready to buy or sell a house. This is a great time. Wayne Barnes – 918-645-1470

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