The Chronicle reports (of course from the Associated Press) that interest rates on 30-year fixed rate mortgages are up slightly (just above 5%). However, we continue to have amazingly, historically CHEAP MONEY.

So, what’s the moral of the story, you ask? You guessed it! Don’t try to time the market perfectly.

Check out this graph of 30-year fixed rate mortgages over the past 3 years? Does it seem to you like a good time to get a loan?

30-year fixed rate mortgage

Recently, I was at the San Francisco Association of Realtors Annual Installation Banquet. This year, we had a real treat! Legendary Real Estate Guru, Barbara Corcoran, was the key-note speaker. She rocks, btw.

She said that in her decades-long career, this is the first time she has seen BOTH CHEAP MONEY AND CHEAP PRICES at the same time. Usually, you’ll get one or the other.

Oh ye of short-term memory, remember the “go-go” 2000s when cheap money shot up house prices all over the country? Well, now, you’ve got cheap money (on safe, long-term loans unlike in the 2000s when cheap money was for riskly, short-term fixed or adjustible loans) AND falling home values.

Consider that folks! It is an amazing opportunity that won’t last forever.

I know many of you (and maybe even yours truly) feel that SF home prices could continue to decline slowly. But the truth is that none of us knows for sure. How long will we have this buyer’s market? How long will interest rates be cheap as hell? Will prices decline further? How much? Will the interest rates increase in the meantime, thus wiping out any benefit of further price declines.

Personally, I’d rather get a 5% +/- interest on a 30-year fixed rate loan now even if my condo continues to decline in the short-term. It’s a pretty good bet that over-time you’ll be psyched to have 5% money on a San Francisco property.

Instead of being perfect, be pretty darn good.

If you are a entry-level single family home buyer with a good job and limited down payment, go for an FHA loan.

If you are a condo buyer with 10-20% down payment, go for the cheap 30-year fixed interest rate loan and the 10-20% off sale on the condo of your choice (suck up the PMI payment if you are less than 20% down; you don’t have to keep it forever but this condo sale won’t last forever either).

Okay, enough ranting for today! We’re off to sell our listings at today’s open houses. Wanna buy one? Right now, we’ve got a fabulous Pacific Heights TIC at a GREAT price and an attractive single family home in Portola that gives space, value and home comforts.

Our motivated first time buyers are also off shopping for a new home. There are some FAB condos on the market right now priced between $650,000-$800,000. 😉

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