Growing Optimism in Real Estate Market
A more serious shift should come from the law on subsidizing housing loans. This project was prepared by the Secretary of Construction and Urban Planning, and it could take effect in the second half of this year. This would give citizens favorable conditions to resolve their housing problem by purchasing an apartment or house. Buyers which opt for housing loan would receive at least 1.2 percent reduction of the bank effective interest rate (EIR) in the first four years of repayment. The total interest would amount to a maximum of 3.95 percent on the year. The draft law passed on public debate and this spring should enter the legal procedure.
Yet, Mr. Ragsdale confirmed that there is optimism and increased interest in buying real estate. In the whole region of Atlanta, real estate supply still exceeds demand. And this means that the prices are still at low levels.
- The interest of the customers has indeed increased, an optimism is noted among the real estate agents from Platinum. In fact, we can talk more about the impression, because that optimism still cannot show any significant increase in traffic or increase in price. - says Ragsdale.
With him agree and other agents from Platinum Real Estate, who point out that most of optimism is fueled by the low-interest rates in banks.
- Government measures which came into force earlier this year, although they reduced the tax on real estate, are not crucial for the increased purchase of real estate. Optimism is spurred perhaps by lower interest rates on mortgages and savings in the banks - says Ragsdale, citing examples of people who used their savings from banks to buy a small apartment which will then rent.
- In this way, citizens are trying to capitalize on their savings, due to the fact that interest rates on savings in the bank is very low. I believe that it was the interest that is the most responsible for the current climate in the property market. Now it is much more favorable than, let's say, two to three years ago - adds Ragsdale as one of the most experienced real estate coaches in Atlanta.
He notes that many realized that it's worth to buy real estate. Housing loan rate is certainly a great burden to families, but usually, it is not significantly greater than the amount which one family pays for the rent of the apartment.
