The state of our economy is still on the forefront of consumers' concerns. Many people are putting off purchasing a new home, new car or other high priced items simply because they are worried about our volatile economy. The housing market is a big part of our economy and its decline has contributed to the overall economic slowdown facing our country. This is one reason that the Feds are trying to keep interest rates down. Lower interest rates stimulate spending.

We have all heard, read and talked about the economy and how bad it is and wonder how bad it’s going to get. So, with all of this… Who’s buying real estate now and why?

Why are people buying now?? This is an easy one. Home prices are low and many sellers need to sell. Banks are successfully negotiating more short sales to alleviate their losses and are pricing their foreclosed homes more aggressively to get them off their books. The interest rate for a 30-year fixed mortgage is around 5.28%. This ties a 23-year low. A 15-year fixed mortgage rate is about 4.89%. An FHA 30-year fixed rate is approximately 5.375%. Most believe that mortgage rates will be affordable for the foreseeable future.

The people who are buying homes now are investors that are taking advantage of low prices that can provide a positive cash flow. This means that an investor can finance the purchase of a home at a low enough price that the rent he can collect will be more than what the monthly mortgage is.

First home buyers and buyers that could not previously qualify for a loan because home prices were too high are now finding themselves in a buyer's market. Buyers are able to negotiate not only the price of the home, but also on a number of terms. These terms can include seller paying buyer's closing costs, down payment assistance, repairs, carpet and paint allowance to name a few. Buyers that are still “on the fence” should contact their lender to see what amount they can qualify for and at what interest rate. Inventory in the Antelope and North Highlands areas have actually decreased over the past few weeks because more homes are being sold than are coming on the market.

There are currently 162 homes on the market in North Highlands with 81 in pending sale and 48 homes have sold since December 19, 2008. In Antelope, there are currently 239 homes on the market with 117 in pending sale and a total of 53 that have sold since December 19, 2008.

The housing market has a way to go before it turns around. Buyers should keep their eye on prices and on interest rates. Loan criteria are forever changing, and a buyer’s mortgage lender should keep abreast of these changes.