As of this morning, there were only 20 detached houses for sale under $5 million in the entire 92130 ZIP Code. That’s a very small amount. Properties are remaining on the market a little longer than they have in the past, however, sellers are receiving multiple offers on their property. The higher interest rates seem to be affecting the first-time home buyer but are not necessarily a deterrent for the seasoned buyer. Only time will tell.
WHAT SELLERS CAN DO TO FURTHER ENTICE BUYERS:
2-1 BUYDOWN: A 2-1 buydown program is a type of financing offer to reduce your interest rates for the first two years of a mortgage. If you opt for a 2-1 buydown, that means as a buyer, your interest rate is reduced by 2% the first year and 1% the second year. By the third year of the mortgage term, the interest rate goes back to the original interest rate on the loan. But with a 2-1 buydown, buyers have reduced payments for the first two years.
3-2-1 BUYDOWN: A 3-2-1 buydown mortgage is a type of loan that charges lower interest rates for the first three years. In the first year, the interest rate is 3% less; in the second year, it’s 2% less; and in the third year, it’s 1% less. After that, the borrower pays the full interest rate for the remainder of the mortgage. For example, with a 6%, 30-year mortgage, the interest rate would be 3% in year one, 4% in year two, 5% in year three, and 6% for the remaining 27 years.
Leave a Reply