If you’ve been looking at Boca Raton houses for sale, you’re watching gradual price increases. Despite a stock market slowdown, prices of homes in Boca have not yet noticed a downturn.
One reason is, as in every town where the school system is highly rated, Boca Raton home prices tend to maintain a better value.
Lack of supply and too much demand keeps prices up
The second and more important reason is lack of supply and excessive demand, especially in homes that are priced in the under $450,000 range. While these homes are always at a premium, the continued lack of inventory helps to keep owners from feeling much of a need to negotiate more than 3-5% off list price.
Higher priced homes equal less competition
As homes climb into the higher priced ranges of $500,000 to $1,000,000 demand remains steady, but competition is not nearly as severe. That is simply because there are fewer buyers in that income category. And as for homes in the multi-millions of dollars, there is always an audience.
In fact, if you look at Boca Raton houses for sale versus houses that have sold, you’ll find that more single family homes per year sell in our priciest neighborhood (Royal Palm Yacht Club) than in any other subdivision.
While Boca house price are up, they are not making the double digit leaps we witnessed two years ago. Last year, the average price increase was just over 6% according to MLS statistics. As a result, it remains a good time to buy a home, especially because mortgage rates remain low.
As rates rise, borrowing may become easier
In fact, despite the increase in interest rates, mortgage rates have not dramatically changed position. In fact rates are running at 3.73%, down from $3.81% a week ago, according to today’s Yahoo Finance chart.
Oddly enough, even if mortgage rates eventually rise – and they will – home buyers may find that borrowing becomes slightly easier. In some parts of the country, it already has.
No money down loans making a comeback
In a move reminiscent of financing before the housing crisis, one west coast bank, the San Francisco Federal Credit Union, is offering a no-money-down, adjustable rate mortgage without private mortgage insurance.
However, there are a number of caveats built into the lending rules to make sure borrowers are legitimate. KPIX Channel 5 reports that they must live locally and the home must be used as a primary residence.
As with standard mortgages, borrowers will have to provide proof of income and have a good credit rating. So this offer is very far removed from the days of holding a mirror under the nose of the borrowers just to make sure they were breathing.
But, according to Preston Ware of The Mortgage Firm, this loan offer indicates that as home prices get farther from the range of the average buyer, banks are willing to stretch a little in order to make loans.
Banks lend in order to make a profit
Ware says this is not done for reasons of nobility, but for pure profit. After all, if mortgage rates go up, banks earn more money. The more money they earn, the more they can lend. Banks are in the lending business. Without making loans, they cannot survive.
So, over the course of the next few months, don’t be surprised if your mailbox fills up with invitations to refinance or to apply for a mortgage loan.
If you’re ready to buy, there’s a house waiting for you
Don’t be discouraged by continued lack of inventory of Boca Raton houses for sale. If you’re ready to purchase a home, there is one in the market that will work for you.
However, if you go in with the expectation that a home must meet 100% of your requirements, you are likely to be disappointed. Even most new homes, unless you are willing to pay to customize them to the nth degree, will fall short of ideal.
However, if you approach a resale knowing that 60% of your desires will be satisfied – and that over time you can improve the other 40% – then you’re approaching home buying with a realistic attitude.
With that in mind, and armed with the knowledge that interest rates are still at historically low levels, call your favorite Boca Raton real estate agent today.
Marc Jablon, the Jablon Team
New Harbor Realty