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February 2012
Rising Rents Good for Real EstateThere is strong evidence to show that this is a fact! For a variety of reasons--principally foreclosures, short sales and the lack of new construction--we saw residential rental rates skyrocket in the East Bay during the past year. This explains why the first-time buyers and the investors are particularly active home buyers right now.Consider, for example, a typical purchase by a first-time buyer: a purchase price of $350,000 with 10% down, with financing at a 4.5% APR (which would likely include mortgage insurance). Add property taxes and hazard insurance, and the buyer might have a total monthly payment of $2047. Take into account the annual income tax savings, and the buyer's "effective total payment" might be around $1600 a month. Compare that to today's rental market, where that same home might rent for $2200/month. The new home buyer saves $600 a month by buying instead of renting! That's money that could be used to cover a car payment, pay off student loans, or take care of some medical bills. For investors, they want to see better returns for their 401k's and disposable incomes. They see rising rents as a great opportunity to create "passive income" and future financial security. Higher rental rates are now giving investors the "positive cash flows" in East Bay neighborhoods that they have been missing in recent years. For the past several years, many of you have asked us for a prediction of when the real estate market will bottom out. We have said all along that it will bottom out when rising rents pass mortgage payments. As you can see by the above example, we've just whizzed by that stop sign. As a result, we may actually see some appreciating property values in 2012! Sellers who have been waiting for the right time to sell should wait no longer. We've seen numerous multiple offers on listings recently because of the lack of good inventory. The next few months may be the best seller's market we have seen in some time! Whether you're buying, selling, investing, or just curious about the market, we're here to help answer your questions. Just give us a call or send us an email.
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Highland Blvd, Kensington
Amazing 3-bdrm 3-bath mid-century home, fully remodeled to perfection for just $799,999! Enjoy breathtaking views of the Bay, the Golden Gate and beyond! Extras include gourmet kitchen, gorgeous baths, and downstairs bonus room with full bath (could be office, in-law, au pair, or 4th bdrm).
Starflower Drive, Martinez
Cozy 3-br, 2.5-bth townhome in Sunrise Ridge priced at just $245,000. Great commute locale near BART, Sunvalley Mall, and all commute routes. Low Homeowner Assoc. dues with higher owner-occupancy ratio!
Patricia Drive, Pleasant Hill
Gorgeous remodeled Gregory Gardens 4-br, 2-bth rancher priced at just $379,900! Extras include updated kitchen and baths with granite countertops, fresh paint, new carpets, and much more! Sold by the Torrey Team with multiple offers over asking price!
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Fair Haven Road, Alameda
Coming Soon! Lovely 4-br, 2-bth mid-century rancher just steps away from the beach at Southshore. Extras include fresh paint, new carpets and much more! Call or email the Torrey Team for more details.
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Poshard, Pleasant Hill
Large 3-br, 2-bth Poet's Corner rancher priced at $399,000! Extras include huge .37-acre lot, inside laundry, open floor plan and much more. This was a fixer-upper short sale listed by Remax and sold by the Torrey Team. This was one of eleven short sales closed by the Torrey Team last year. We went 11 for 11 in 2011!
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Candelero Drive, Walnut Creek
Northgate 2-br, 1.5-bth condo for just $275,000! Sharp end unit near Heather Farms features inside laundry, mirrored closets, private patio, walk to BART, shopping and parks! The Torrey Team can make this short sale happen!
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