If you didn’t see the news yesterday and own a condo in the Jupiter area, or are thinking about either selling or buying one, pay attention. Close attention. Yesterday President Obama quietly signed H.R. 3700 and what you need to know is it will make it much easier for borrowers to finance condo purchases. Here in the Northern Palm Beaches that is BIG news.
You see, ever since the real estate bubble burst back in 2006, it has been tough to finance condos. In almost all cases, a borrower needed at least 20% down and more often than not 30% down to qualify for a loan. Most first time home buyers could not even think about a condo as they did not have the significant amount of cash it requires for a conventional loan with large down payment requirements. Prices were held in check because of the difficulty of financing.
First time home buyers with limited resources looking to buy a home with a low down payment FHA loan were locked out of the condo market. That door has now been opened. Consider that in Jupiter last year the median single family home price was $425,000 and the median condo price was $260,000. Guess which one is probably more in line with the budget of a first time home buyer? Consider that 65% of all single family home purchases in Jupiter last year were financed and many of those with low down payment FHA loans. Guess what percentage of condos closed with loans. Only 36% and almost all of those were conventional loans with down payments of 20% or 30% or more.
All of a sudden those buyers who want to buy but could not afford a single family home or come up with large down payments are now in the condo market because of the bill signed yesterday by President Obama. Increased demand with no change in supply means higher prices. All things being equal, this new financing availability could easily add 10% to the median condo price in the Jupiter area; especially in those communities near the median price of $260,000 and below.
It won’t happen overnight but median prices on condos will be under upward pressure now that an FHA loan is a viable means of financing. If you are looking to buy, buy now. If you are looking to sell you may decide waiting is a better option. There are certainly other market forces that play a role in prices but this news is truly a game changer.
Again, real estate is not an easy game and finding someone who knows how it is played is a challenge. Before buying or selling anything, interview at least 3 brokers. Ask a ton of questions and find out how they will help you meet your goals and how much it is going to cost you. Paradise Sharks LOVE to be interviewed and you can set yours up today at 561.308.0175 or firstname.lastname@example.org.