In case you missed it, here is an interesting article from the San Diego Union Tribune that is worth a read.

Many sellers are wondering if this is a good time to put their home on the market as we approach the beginning of summer and with interest rates at all time lows. It's definitely a good time to sell, because buyers are still out there searching for just the right home! The amount of inventory on the market has been absorbed due to the recent tax credit, so when a nice property comes on the market it tends to move quickly when properly priced. Days on market time has also shrunk, which is good incentive for sellers to come on the market now.

It's true that buyers are taking their time in looking for "the home", but once they do they are prepared to close quickly. There is still a good size pool of buyers who have done their research and renting until they find a home to purchase.

Check out the article below and feel free to contact us for more information on what's happening in your neighborhood. We would love to meet with you to discuss how we can market your home to sell.

Should San Diegans buy, refinance or wait?

By Roger Showley, UNION-TRIBUNE STAFF WRITER

Thursday, May 27, 2010 at 6:17 p.m./photos/2010/may/28/170013/

With mortgage rates again nearing their 50-year low, would-be San Diego County buyers and homeowners have to make a choice:

Buy or refinance now and lock in the rate;

Wait and hope rates sink even lower, as some economists are predicting;

Or watch rates rise to as much as 5.5 percent, as other economists predict, and make up the difference by an expected 5 percent dip in home prices.

The issue arose Thursday, as Freddie Mac's weekly Primary Mortgage Market Survey showed the average rate for a 30-year, fixed-rate loan at 4.78 percent, down from 4.84 percent last week and the lowest since the 50-year low of 4.71 percent in December. Rates and fees vary by region and lender.

"Strike now," said Gary McBride, Bankrate's senior analyst. "If they move quickly against you, it just takes money right out of your pocket."

San Diego mortgage broker Ed Smith, president of the California Mortgage Brokers Association, said refinancing now makes sense for owners whose loan-to-value (LTV) ratio is no more than 80 percent, for example a loan of no more than $250,000 on a home valued at $312,500.

"I will strongly encourage them to move forward if they could, " he said.

If the LTV is between 80 percent and 125 percent, various government and lender programs offer some refinancing options.

If the LTV is greater than 125 percent, "they're definitely in a pickle," Smith said.

"For those individuals who don't have an option to do a refi, I would encourage them to look at some of the government (loan modification) programs," he said.

For buyers, the decision to act comes down to where you are in the purchase pipeline. If you're still looking for a low-cost short-sale (properties sold for less than the mortgage balance), it doesn't pay to lock in the low rate for the maximum 55 days, because it can take months to seal the deal, Smith said.

"I wouldn't hedge that bet," he said.

The price to lock in a rate can add as much as a quarter-percentage point to the loan rate and sometimes an additional fee if escrow takes longer to close.

But for buyers of newly built homes and nondistressed properties, he said, locking in the rate is a good strategy if escrow can close quickly.

Lorie Staehling, manager of the new Windermere Properties office in downtown San Diego, said she is concerned that holders of adjustable-rate mortgages will refinance with new ARMs rather than fixed-rate loans.

"Yes, the payments are higher for fixed rates than ARMs," she said. "But what will they do when the rates are up five points? They're now at the bottom. People sometimes are very short-term sighted."

She said many homeowners and buyers don't realize that rates exceeded 10 percent in the 1980s.

For the moment, Staehling said, the low rates mean more affordability and will offset the end of the federal homebuyer tax credits. A $100 million state credit program took effect May 1, but nearly 40 percent of the money had been reserved as of Thursday, the Franchise Tax Board said.

One of her clients, first-time buyer Manuel Muñoz, 40, locked in a rate at 4.875 percent for a $350,000 four-plex in southeastern San Diego, due to close escrow next week. He said he thought of asking for a discount, but is happy with the terms.

"I thought that this was the best time to buy," he said.

Frank Nothaft, Freddie Mac's vice president and chief economist, said his long-term forecast calls for rates to rise as high as 5.5 percent in the second half of the year. External factors, such as the current euro and Greek crisis in Europe, are keeping rates low, but they are unpredictable, he said.

"We're talking about a very modest uptick, starting in the third quarter of the year," Nothaft said.

His advice on whether consumers should wait or act: "That's really an individual choice. There's that old expression - a bird in a hand is worth two in the bush. You don't know what will happen tomorrow."

Source: San Diego Union Tribune

http://www.signonsandiego.com/news/2010/may/27/mortgage-rates-and-choice/