The "818" on Real Estate

LET’S EXPLORE -- Buy my Granada Hills listing Town-House at $375,000 with 20% down payment - $75,000 Estimated Interest Rate: 4.99% Loan Amount: $300,000 Monthly Property Taxes: $391 Monthly Homeowners Insurance: $80 Monthly HOA: $485 TOTAL PAYMENT: $2,564.63 OR wait for the market to go down 10% and purchase at $337,500 Estimated Interest Rate: 6% Loan Amount: $270,000 Monthly Property Taxes: $352 Monthly Homeowners Insurance: $80 Monthly HOA: $485 TOTAL PAYMENT: $2,535.79 While you wait you're paying someone else's mortgage by renting and not receiving a tax benefit. On top of that the total cost for the higher interest rate is much more in the long run. .. you decide.

“Survey SAYS” XXX There are always fluctuations in all markets. Two basic indicators for price changes are SUPPLY & DEMAND. In October 2018 there were 1,628 (SUPPLY) “existing” homes for sale in the San Fernando Valley and 1,068 (DEMAND) sold. 1,628/1068 = 1.52 month’s supply. That USUALLY would mean that we are in a seller’s market and prices would continue to rise until the market balances out ….BUT since the “average home sales price” has increased over 35% since 2013, and the median household income has only increased about 20% since 2013 the affordability has lessened. Not to mention mortgage interest rates increasing. (Los Angeles County Median Household Income for 2013 $54,432. 2017 was $64,300) – U.S. Census Bureau Granted, it is the holiday season but I am personally having to adjust prices downward for the first time in years. STAY TUNED!   SEHOLD IN

What is equity in terms real estate?  The Investopedia definition is:  The difference between the current  fair market value  of the property and the amount the owner still owes on the  mortgage . It is the amount that the owner would receive after selling a property and paying off the mortgage. Also referred to as “ real property  value.” Equity can either increase or decrease in any given year.  Can you access this money before you sell? YES - You simply complete a "cash-out refinance". This means that you'll reset the clock on your mortgage (sometimes lowering the payment) loan and increase the balance. Some people like to pay down their mortgage as fast as possible and others like to put their EQUITY to work. Putting your equity to WORK simply means that you'd reinvest this money into another property. You might want a bigger or smaller home or you might want to purchase an investment property to rent out.   An example: Purchase price: $55