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Current State of the Market – A Message from the Broker – June Edition

Over the last thirteen years real estate has been in a Bull market, which changed the way that we look at the 7-year cycle that previously rang true. This heating and cooling of the market, low interest rates, and removal of subprime loans has created something better and different than before.

Some of the gains have been:

  • Larger equity increases across the entire state
  • Record low default and foreclosure rates
  • High demand / Low Inventory
  • An increase in well qualified borrowers

As we addressed in the first State of the Market, (which you can read here: pt. 1), top economic experts do not foresee a bubble situation. The market gains do not support it.

Now in June, Private Money Lending has remained unchanged. In fact, you could say that the miserabilism and rising rates have increased the benefits of our loan programs. Hard Money rates are constant and now overlap with conventional lenders who are tightening their lending requirements.

This has created a prime opportunity for Direct Private Lending and brought in a higher frequency of qualified Borrowers. So here is a recap of our last month:

  • In May, our investors helped fund over $18 million in loans at an average interest rate of 9.5%.
  • This is up from April’s $17 million at an average of 10.2%*.

*Note that lower rates are granted to Strong Borrowers with Low LTV.

While talk of inflation, recession, and panicked markets continue to consume the energy of the media – remember that real estate continues to be strong. The last two weeks in our local market had some of the highest amount of new listings coming on the market in a very long time.  Buyers are flocking at open houses.  One we went to last weekend had over 30 buyers touring the house at the same time.

The market may be changing and look different, but there is a reason why mortgages are used to hedge problems in the economy. It’s because of the strength in real estate.

Broker and Co-Owner of family owned and operated Hard Money company, Sun Pacific Mortgage & Real Estate "California North Bay Hard Money Loans Specialist!" DRE License# 01858042 / NMLS #1221130