By DeeinAustin™

U.S. interest rates fell in February, creating a more brisk real estate market in Austin and other areas of the country.

Sorry to report, but rates are rising almost every week. Buyers are now faced with a common dilemma in today’s buyer markets. They often  ask…

"If home prices are still going down, should I wait to purchase until later this year?"

The short answer is no. It’s not smart to time the market. My advice to first-time, move-up, and relocating buyers: buy when it’s the right home at the right time for you.

THREE REASONS WHY NOW IS A SMART TIME TO BUY

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By Carey Eskridge

While  conventional wisdom has the housing market taking a beating, Texas has been largely immune to the slump that is hitting other parts of the country.

As Dee has pointed out recently, market indicators for San Antonio, Dallas,  Austin, and even Houston may not be the best we’ve seen in recent years, but there’s no "sky is falling" scenario playing out in the Lone Star State. A few recent news items may indicate that recovery is on the way.

Last week saw two bits of potentially good news.

GOOD NEWS FOR THE U.S HOUSING MARKET

First, Freddie Mac reported nearly across-the-board drops in mortgage interest rates. Perhaps most importantly, the average rate on 30-year, fixed-rate mortgage fell to it’s lowest point since September 2005, resting at 5.96 percent, but rates on 15-year fixed and 5-year adjustable mortgages also fell.

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By DeeinAustin™

How’s the Texas real estate market? Are we still selling houses? Has the mortgage market gotten better? Is now a good time to buy? Sell?

Yes! Good news is that Texas real estate agents are still selling houses and the mortgage market is on a rebound. In fact, December is often the month for investors and buyers to get the best deals of the year.

The real estate market statistics for October posted last week for most Texas cities, so our team will provide summaries soon.

In the meantime, Mary Stephens, Loan Officer from City Real Estate and Mortgage, provided a Texas mortgage market update. I met Mary on an Austin property tour and she recently stepped in to help one of our investors with a land deal once their lender couldn’t come through.

TEXAS MORTGAGE MARKET UPDATE: Q&A WITH MARY STEPHENS

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Ok, so the mortgage market is rough. Summer 2007 was a pretty odd time in American history. Over 120 banks went out of business and the FDIC shut down Netbank for their failed lending practices. My father had many accounts at Netbank, so he’s living the nightmare right now. (More on that later).

I interviewed Gray Buffington, a Texas Mortgage Broker that I trust. He’s been in the business since 1986 and has followed the market through boom and bust cycles. I asked Gray to tell me the truth on the mortgage market and whether Texas will make it out alive in 2008.

INTERVIEW WITH GRAY BUFFINGTON

Give me some background on how you got started in real estate.

It’s been a venture of 20 years so allow me to make this as succinct as possible! While I was an undergraduate in college I had an opportunity to do an internship with a local bank in Austin. I fell in love with Austin and, upon graduating in 1986, immediately began working for a local Mortgage Company. I formed Buffington Mortgage in 2002 and we’ve quickly risen to become one of Austin’s top lenders, in part due to our focus on pushing the envelope in customer service.

I think Alana (Chandler) is one of the coolest women I’ve ever met. How did you meet her and what’s her role?

Alana had done all commercial art and ad copy for a small Austin company and a few years later they were in stores around the world. Alana’s role as the Marketing Director for Buffington Mortgage is to insure that our message of outstanding service and value is communicated to all of our clients and referral partners.

Here’s the big question. Tell me more about the Texas Mortgage Market. Are things out of control?

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I’ve been working on the monthly Texas market updates, so checked in on mortgage interest rates.

As you may know, home mortgage rates were decreased by half a point. This is the first decrease since 2003, so now is an even better time to buy. According to Inman News, the most compelling reason for the recent upswing in applications was the large decline in interest rates.

The MBA (Mortgage Banker’ss Association) reported that:

• The average contract interest rate for 30-year fixed-rate mortgages dropped to 6.25 percent from 6.42 percent
• The rate on 15-year fixed-rate loans slid to 5.9 percent from 6.1 percent
• The rate on one-year adjustable-rate mortgages (ARMs) declined to 6.34 percent from 6.52 percent.

This is very good news and confirms what I’d recently explained to a beginning investor that the Federal Reserve learned from the mortgage crashes in the 80s. Banks are much more smart in their overall mix of loan products and mortgage rates are expected to be increased or decreased to spur or slow the real estate market as appropriate.

Read the full report on Inman News.

Read our previous story on how the mortgage fallout created a Buyer’s Market in Texas.

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I received an email alert from Keller Williams that gave good tips on how to approach the changing real estate market. Both buyers and sellers can still fair well!

Texas sellers were experiencing a very hot market from 2005-2006. Although the investment and relocation markets in Dallas, Houston, Austin and San Antonio are still doing well, sellers must be aggressive in their pricing.

Tom Sherman, President of Mortgage Services Unlimited in Dallas, emphasizes the importance of educating clients. Hot tips for home sellers across the country:

• Home values can stay stagnant or potentially decrease. The inner loop in Houston, Downtown Dallas and Central/South/Lake areas in Austin may be less affected.
• Qualified borrowers are looking for deals.
• Fewer borrowers are qualifying for home loans.
• Rising foreclosures tend to negatively affect home values.
• Increased “days on the market” (DOMs) increases the likelihood that buyers will aggressively negotiate prices down.
• Continued stress in the financial markets will affect consumer confidence.
• Loans may take longer to close.
• Appraisals are becoming more difficult to obtain.
• Properties should be funded before contract contingencies are removed.

It’s critical that sellers price homes to sell — and sell quickly — decreasing the need for price reductions. Commercial property sales are actually fairing very well since most lenders typically required 20% down. Condo version opportunities are still popular, for instance.

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