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Distinctive Country Properties
860.435.9891 |
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12.17.09 Low interest rates should be stimulating a (great) desire to buy. In Canada, there is a real estate boom going on. Why? Mortgage rates recently have been available between 2% and 4%. This is a real incentive. Our rates are mostly between 4.7% and 6% depending on the program. While these are low, historically, they are not in the ball park compared to those in Canada. There are other problems that keep our market from 'breaking' out. First can be buyer's qualifications that limit what banks are now willing to lend (them). The other side can possibly be the properties themselves. Do, or will, they qualify. The higher up the price scale a transaction goes, the harder it can be to have it qualify for a loan, especially if a buyer is going for a 75+% loan against a purchase price. A big problem right now is a lack of qualified comparables for the appraisers to use in 'comping' out an application. Few sales of properties are occurring in the 7 figure category. Banks are therefore unable to assess their real value, for granting certain loan requests. Things are easier if a buyer doesn't go for the maximum mortgage amount. It is relatively easy to qualify a larger purchase if there is more buyer money put into the purchase. Until a new sales history is established, it will keep larger sales limited to cash purchases. This alone will keep the sales pace from returning to the 'days of old'! ©2009 R. Leech features.
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Robinson Leech Real Estate 318 Main Street | P.O. Box 1627 | Lakeville, Connecticut 06039 Phone 860.435.9891 | Fax 860.435.9400 | info@robinleechrealestate.com
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