Real Estate Letter

Dear

Can you believe it? The real estate market is still going strong. In the last five years, home prices in California have doubled. The median home price according to the California Association of Realtors (SRAR) increased to more than $522,000 in May. And low interest rates continue to make it more affordable to own a home.

If you're worried about a sudden burst of the housing market bubble—don't. The National Association of Realtors predicts the market will show more moderate growth over the next couple of years. Similarly, mortgage rates are expected to edge upward to 6.1 percent by the end of 2005 and 6.5 percent in 2006, but remain historically low.

Commercial purchases and rentals have also shown significant growth. Office vacancies are down and rents are going up. Job growth is seen as one of the many factors contributing to this upward climb.

It's still a solid sellers' market out there. A higher number of speculators are purchasing property as an investment, pushing home prices up. And demand still outweighs market supply.

Buyers should beware of interest only mortgages or those with initially low monthly fees. Once the grace period is up the monthly payments will skyrocket, leaving some home owners' house rich and cash poor.

Sincerely,

[Realtor]

P.S.: If you know anyone who is planning to purchase or sell a home, please send them my way. It will be my pleasure to assist them in this transaction and educate them about the ever-changing real estate market.