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A market for home buyers

I sat down last Monday with Randy Casto, Keller Williams Realtor, and queried him about the current market.

Q: Are there great opportunities for home buyers now?

A: Yes, unbelievable! We identify this market as a “buyer’s market” because everything about it favors the buyers: price, negotiating, inventory, and we’ve even been blessed with the bonus of historically low mortgage rates. I can’t think of a time in the market place when all of those characteristics have been perfectly aligned. Susan, you keep reminding me that with mortgage rates under 6%, this is quite possibly the best time in the past 2 decades to make a purchase. You can buy cheaper than you can build. Also, because you’re buying so low you’ll pay less in property taxes. There are phenomenal values in all price points from the mid-$200,000 range all the way to $2 million.



Q: I have low-cost financing available on commercial real estate. Are you seeing great deals for commercial property?

A: Absolutely. What we’re seeing are inventories rising. The capital gains rate is currently very low so sellers are motivated. Both office/professional and retail properties are experiencing higher capitalization rates giving the buyer stronger cash flow, henceforth a shorter payback period. Very few commercial opportunities become available in Nevada County so the competition for them is frenzied. To best serve my commercial buyers, I’ve branched out throughout California, from Bakersfield to the Oregon border, pursuing terrific investment properties with the right cash flow. It’s a great time for commercial.




Q: Why buy now … or should I wait?

A: Realistically, when all opportunities are in favor of the buyer, what are you waiting for? This makes me laugh. In a seller’s market when all opportunities lean towards the seller, no one ever asks this question. In today’s market, it’s like buying on sale. You’ve got to love that.

We’ve been hearing heaps about values declining in the Sacramento, Riverside and Modesto real estate markets. How is our Nevada County market different from those?

We’re not isolated from the California economy but our real estate market has never been fueled by our local jobs market. Nevada County is a “quality of life” location. Having said that, we are getting better jobs here but we don’t seem to attract transient traffic. People tend to own their homes longer, which promotes more stable values long term. Many people buy here for second home use, or for retirement in the future. They look at their investment is a 10-20 year plan. Sometimes that includes buying land towards a future building plan.

Just look out your window. We are probably one of the most unique areas in California. A close commute to major metropolitan areas, a destination area with a strong sense of community, awesome natural beauty with an abundance of recreational choices, historical sites and diverse topography. You can find properties with creek scenes, views, lakes, snow caps or a brief walk into town. We’re not dominated by subdivisions. Most of our properties are one-of-a-kind. That is what many city folks are looking for, especially with the baby boom demographic which is now assessing where they want to retire.

I believe as we go into 2009 we will see consumer confidence accelerate and quite possibly interest rates will not be as favorable as they are today. Will there be a plethora of first time home buyer programs available? Will the qualification process be more difficult? If interest rates start rising, how will that affect how much home you can afford?

Historically when consumer confidence is strong markets recover. If you feel as though you missed the buying opportunity boat prior to the last housing boom, I suggest looking closely at today’s buying opportunities. Ten years from now we’re going to look back to 2008 with envy for those who bought today and reaped the financial rewards.

Randy Casto can be reached at Keller Williams Realty, 530-362-0518

Susan Costello is the 24/7 Mortgage Consultant and owner of Home Sweet Home Loans. You can reach her at 530-273-8658.


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