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Pending Home Sales up 23% in Cedar Rapids

April 14, 2010
By skogman
 

Spring has sprung in Cedar Rapids!  Buyers are out in full force and are looking for the homes of their dreams.  Pending home sales in Cedar Rapids for the first quarter are up 23% when compared to 2009.  Skogman Realty’s pending transactions were up 32%! 

2010 is off to a great start and we expect to keep this momentum going through April 30th and the end of the tax credit deadline.  With only a couple weeks remaining there has been a lot of speculation that the sales we are seeing today are sales that would have normally come in future months.   While we hope this isn’t the case there is really no way of knowing if the number of buyers will significantly drop off May 1st. 

So what does this mean for you?  For sellers, the April 30th deadline is as important for you as it is for the buyers.  Buyers are hurrying to get an accepted offer by April 30th, they are highly motivated and have a lot of homes to choose from.  With approximately 1200 homes for sale in the Cedar Rapids metro area there is a lot of competition and your home needs to stand out from all of the others.

For buyers, because homes are selling quickly it is important that you are pre-qualified and have all of your ducks in a row so when you are ready to make an offer the sellers know you are willing and able buyer. 

 
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What Makes Now a Great Time to Buy a New Home ?

April 5, 2010
By Patrick St. John
 

Uncertainty with rates and the homebuyer tax credit make now a great time to buy:
For months now we have been talking about end of the Fed’s Mortgage Backed Securities (MBS) Purchasing Program, well that time is here.  With the program ending March 31st, we started to see rates jump upward in the final days of the program.

To reiterate, for more than a year, The Fed has been purchasing MBS on a regular and sustained basis.  By doing this, supply has been boosted thus prompting a decrease in long term mortgage rates.  Rates have stayed at historically low levels (below 5.0% for the most part) but with this program ending, we can all but guarantee that rates will indeed begin increasing.  How high they will go is still a bit of a mystery but most analysts are projecting anywhere from 5.5% – 6.5% by the end of 2010.  How this will impact shorter term programs such as ARM’s (Adjustable Rate Mortgages) is yet to be determined.

For example on a $200,000 loan an increase in interest rates from 5 to 7.5% is obviously 3%.  But the effect it has on your buying power is a whopping 30.3%!

Interest

Rate

 $200,000

30 year loan

 Loss of buying power Accumulated loss

%
5 $1073/month 5.8% n/a
5.5 $1135 5.6% 5.8
6 $1199 5.3% 11.7
6.5 $1264 5.1% 17.8
7.0 $1330 5.0% 24.0
7.5 $1398 4.9% 30.3

Low interest rates combined with the homebuyer tax credits make now a great time to buy, but time is running out as contracts must be signed and accepted by April 30th.  There must be a lot of buyer thinking this way because Skogman Realty’s first quarter home sales in the Cedar Rapids metro area are up 22% from 2009 and are expected to stay strong through the end of April.

Please consult with your Skogman Mortgage Professional today as there are still some incredible options available with our Conventional, FHA, and VA Products.