Right now this looks like a good time to buy a house.  During the first half of the last decade we had rapid increases in home process and in last half we have seen home values fall back to roughly 2003 values.  Mortgage rates continue to be close to record lows and huge number of foreclosures and short sales in the Sacramento, while painful for the homeowners, are creating some great bargains for buyers.  Finally we have the government providing significant tax credits to first time buyers and most previous owners if they can close by June 30.

The only negative element impacting the Sacramento real estate market is tighter credit standards imposed by mortgage lenders.  They are checking and double checking every application, title report and every other aspect of the transaction.  With California unemployment hanging around 12 percent and the State virtually bankrupt there are still too many local residents who are not able to take advantage of the current market.

Having set the stage, here are the three things you should know about the Sacramento real estate market:

1.       Prices are at their lowest:  After so many years of declining prices we appear to be seeing signs of price stabilization and increases in some area and parts of the market.

2.       Mortgage rates will increase:  A key factor behind the near record rates has been a Federal Reserve program to purchase mortgage backed securities from Freddie Mac and Fannie Mae.  Unfortunately the program is scheduled to end on March 31 and if private investors don’t pick up the slack, rates will increase.

3.       Tax credit program over at the end of June:  First time buyers are eligible for an $8,000 tax credit if they are in contract by April 30 and close the sale by June 30.  Existing and previous homeowners are eligible for a $6,500 credit

If you or someone you know is considering buying or selling a home and have questions about the current market conditions in the Sacramento area, please do not hesitate to call or email me.  You can send an email to JulieJ@Jalone.com or call our MagnumOne Realty office, (916) 290-9339.