Avante Real Estate – East Bay Real Estate Blog

East Bay Blog

Some Good News...Finally!

August 25th, 2008 10:53 AM

If you keep up with my blog, you know there has not been much to keep up with over the last several months. I have been waiting a while to write this next entry and I'm glad I finally have the opportunity to do it. Over the last year I have tried to keep you up to date when changes occur in the East Bay housing market. For the last several months there was really nothing to update you about. If you watch the news and read the papers you know the economy as a whole has not been doing well, the primary reason being the problems in the housing market, BUT we finally got a bit of GOOD news today in housing, the first time in recent memory. Home sales in July were up nationally, and the region with the largest gain was the West, where home sales sky rocketed by 9.7%. That is the largest gain out of any region in the U.S.

So why this big gain in home sales last month? Obviously the large decrease in prices have a lot to do with it. As prices have dropped buyers have waited on the sidelines. Finally the time has come where prices are too good to ignore. As sales start raising, this will help to finally stabilize prices. I believe this so strongly that we took advantage of this terrific buyer's market by buying an investment property ourselves in July. As they say, put your money where your mouth is, we did.

There are investment properties now that will provide positive cash flow even when you finance the whole purchase price. Don't get me wrong, there are no 100% financed loans out there for investment properties anymore, but if you borrow the down payment from another source and do the math on payments you can find homes with positive cash flow even when having to repay the whole amount with interest. The reason is the rental market continues to stay strong. One reason for this is that a lot of the people who lost their homes over the last several years need somewhere to move to. The rental market is especially strong in the cities and areas close to urban centers where there are jobs. The central valley is still suffering with lower sales due to the fact that many people in those areas who lost there homes are moving back to the bay area and urban centers, closer to work. Proof of this is the article in CNN.com dated August 13th that talked about the migration out of Central Valley cities like Merced, Modesto, and Tracy.

Hopefully I will have a lot more to blog about in the coming weeks and months. My guess is that by next spring we will see the housing market begin to stabilize once again as all of those buyers that have been sitting on the sidelines for these last several years come back into the market. As always there are just my opinions, until next time.

Posted by Ted & Lucy Ramos on August 25th, 2008 10:53 AMPost a Comment (0)