Conventional wisdom tells us that we do not know if we have hit bottom until we are on the way up. Trying to “time” the bottom is a matter of luck. For buyers of Palos Verdes real estate I encourage them to consider the following:
1) Interest Rates are at historic lows. 4.75% for conforming 30-year fixed and 6.625% for jumbo 30-year fixed rate loans.
2) Many buyers are sitting on the sidelines waiting and watching. Buyers entering the market now have less competition and are able to negotiate better with sellers.
3) If you are going to live in your home for at least 5 years you will probably experience appreciation on your home. According to the California Association of Realtors, over the past 40 years homeowners who held their properties for 5 years had an annual average return of 11.7%. The exception was for homeowners who purchased properties in 1989 through 1992.
4) Mortgage interest is deductible on federal and state tax returns (no more than $1,000,000 mortgage on home acquisition) if you itemize your deductions. Property taxes are also deductible unless you are in Alternative Minimum Tax situation. Always check with your accountant for specifics.
5) You have the opportunity to live in one of the most beautiful places in Southern California with temperate weather and distinguished public schools.
6) What are you waiting for?
