Friday, August 25, 2006

The Tacoma Real Estate Market is Slowing Down this is True...

Don't let Real Estate Agents try to fool you, the market is slowing down. The market is swinging back towards a buyer's market. However, there are some key issues I would like to address. Properties of all kinds, are selling quickly if priced and marketed correctly.

For example a 3 bed / 1 bath, 2000 sq ft house right off 6th Avenue went for 5k more than asking price and was under contract in less than a week.

Now is a very good time to buy or exchange investment property. Why?

The investment property market is slowing but still healthy. The market is shifting from a strong seller’s market over the last four years to a buyer’s market. Increasing interest rates and home prices in the single family housing market, condo conversions, and a stable economy are contributing to lower rental unit supply and increasing rents. For the first time in years, renting is a much more viable and affordable option than buying, with owners getting greater cash flow as a result.

Why is it the perfect time to buy or exchange rental property?

  • The multi-family property market is still strong with correct pricing and intelligent marketing. Over a quarter of the properties sold in the last two months were on the market for less than three weeks.
  • Multiplex inventories have doubled in Pierce County over the past year.
    A 4% rent increase in the last 12 months with a projected rent increase of 14% of the next two years.
  • A projected net operating income increase of 21% over the next two years.
    In Pierce County, the market vacancy rate is 4.8%. That’s the lowest rate since early 2001 and down from its peak of 8.2% less than two years ago.
  • In 2006, 5,000 rental units in the tri-county region will be converted to condos significantly decreasing the supply of available units, and putting additional upward pressure on rents.
  • "Mortgage rates are down for the fourth straight week and are the lowest they've been since mid-April." Frank Nothaft, Freddie Mac chief economist, Aug. 17th.
  • There is now a difference of $550 between the mortgage payment of an averaged price home in Pierce County and the average rental of an updated 2 bed / 2 bath apartment, making renting an attractive cost-saving option for many people.

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