What are the "gold nuggets" in this market?

Sharon Tudor Isler
CRS, GRI, SRES, Broker
Phone: (406) 556-5048
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August Greetings from Sharon and Brian,

With all the turmoil in the national news, we thought about not sending a newsletter this month.  After all, if the leaders of our country don't know what to do, what could we possibly suggest to you?

Well, we've thought of a few ideas that might be of help in the real estate world.  They're gleaned, of course, from lots of different sources that we read every day.  We hope this "food for thought" will be of help to you in these puzzling times.

WHAT ARE THE "GOLD NUGGETS" IN THIS MARKET?

#1.  This is a great time to "move up."  If you bought your house a few years ago, but have outgrown it (kids, dogs, parents, or?), this would be a wonderful opportunity to buy a larger home.  Even if you won't be able to get the price that you were thinking was there on your current home, you will be buying in a higher price range where the prices are down even more. And your appreciation at that higher value will eventually give you much more equity.  Plus, the space you need!

#2.  Interest rates are at the lowest they've been in years.  According  to the WSJ, "the U.S. Federal Reserve on Tuesday signaled it plans to keep its benchmark short-term interest rate close to zero for at least another two years"  The question is do you want to try to "time the bottom" of real estate prices?  A lower purchase price is much more important than the interest rate over time. 

#3.  Rule of Thumb for Real Estate from Irwin Kellner, PhD, chief economist for Market Watch:  "When the nationwide median home price is less than three times median household income, it's a good time to buy. Right now, it's 2.7 times - the lowest ratio since the 1980s, so it may be time to buy."

#4.  If you're happy in your present home, the low rates may be an opportunity to re-finance.  Falling mortgage rates can lead to big savings.  A homeowner with a $700,000 30-year fixed rate loan at 5.5% pays $3,974 a month.  By refinancing to a 30-year fixed rate at 4.5%, the payment drops by $428 a month - a savings of roughly $154,080 over 30 years. Call your bank or mortgage lender to see what they can do for you.

#5.  If you have funds that need a home, and you're concerned about the equity and bond markets' volatility, you may want to think about investing in good, solid income property. The buys out there are unbelievable. There are many renters now, and will probably be for the foreseeable future. Here in a university town, this could be the way to go! 

#6.  If you've been renting or leasing, now may be the time to see if you can qualify for a mortgage. Its true that you do need a good credit history, but there are many programs out there with low down payments.  And these low prices won't last forever.  You might be surprised what could work for you! Then come see us and we'll help you search for your new home!

#7.  "Theyre not making any more" - land, that is.  When prices are low, it's the time to buy land.  Investing for the future, with low expenses, makes sense for many people.

For help on any and all of this, or anything that relates to real estate, just give us a call or email.  We're so glad to be living and working in this beautiful Bozeman, Montana. Hope you had an opportunity to see "Oklahoma" at the Ellen Theater, some of the best of Bozeman's talent.  Last weekend's Sweet Pea Festival was special, the Downtown Bozeman Art Walk is Friday, ball games, golf and rodeos are in full swing, and the hiking trails and fishing rivers and streams are beckoning. Enjoy!