Alhambra Real Estate
Alhambra Homes For Sale - Investing in Real Estates of Alhambra, CA

You Will Need Some Cash to Take Advantage of These Prices

By Lee Lieberg

Gone, for now, are the days of 100% financing. Today you need a down payment to purchase a home. The financing terms I see these days are more in line with what it traditionally took to buy a home before the days of sub-prime loans.

When I tell people that the fundamentals of the Alhambra real estate market look pretty strong and appear to have leveled off they usually ask, “What kind of loan can I get?”

I know I glossed over the part about the fundamentals looking strong, but let me briefly tell you why. We have had six months since the lowest median price of March 2008. Sales volume is back to a decent number, and the inventory is the lowest it has been in years. Last month there were 25 homes and condos sold, and the current inventory is 104. This is only a four month supply.

Combine that with the September number where only 22% of the homes sold were foreclosures or short sales. Unless this number takes off, I would say the worst is behind us.

In this economy no one knows what is going to happen, but I feel more confident telling people to buy a home today than a year ago. Would you rather have it in the stock market? How about in Indy Mac?

But let us turn to the question of the day. What kind of loan can I get? While I can not tell you what kind of loan you can get, I can tell you what other people have been getting.

I decided to take a look at the loans used to purchase homes in September of 2006 and compared them to the loans of September 2008.

Two years ago, 56% of the loans in Alhambra required a down payment of 5% or less. Of those, two out of three were zero down. Only 23% had a down payment of 20% or more.

Last month those numbers more than reversed. 71% of the loans required a down payment of 20% or more. Only 8% required a down payment of 5% or less. The few that recently had the lower down payment were most likely able to take advantage of a 3% down payment for an FHA loan. These are available, but require more income to qualify.

So when asked, I answer the question of what kind of loan one can get by suggesting that they prepare to put between 20 and 30% down.

We may soon long for the days when you could have bought the average home in Alhambra for less that $500,000 with an interest lower than seven.
 

*Data was obtained from California MLS Alliance and deemed to be reliable. Lee Lieberg can be contacted at lee.lieberg@dilbeck.com.