BAKERSFIELD, CA - As the number of foreclosures in California dropped to a seven-year low in January, more people are in the market for a home. With historically low interest rates, companies backed by large funding are snatching up what little opportunities there may be.
Experts say now's the time to buy as mortgage rates are around 3%, but there's some competition in the housing market.
Economist Steven Van Metre said, "On a 30 year mortgage, they're still under 4%, which is just amazing in terms of what people can get for their dollar."
Local experts say historically low interest rates make the housing market extremely attractive, especially for people who lost their homes during the recession.
Van Metre said, "As they go back and look into the market, they're looking at being able to purchase maybe the same or a larger home than they had before with their mortgage being less than their rent."
With the lowest interest rates experts say they've ever seen, there are more opportunities for people who had foreclosures or short sales to buy homes, if they can find them.
Bakersfield Association of Realtors President David Knobb said, "Last month we have 1.7 months of inventory. So, basically that means is if another house was not listed, with the number of houses that we would sell, we'd be out of homes in 1.7 months, to sell. So, we have no inventory, that's the biggest problem."
In many cases, investors are buying houses with cash, making the number available to individuals, even smaller.
"Really what we're seeing is a lot of investors buying because prices are low and cash is really king and they have it," said Van Metre.
Banks prefer cash buyers for multiple reasons including avoiding the lengthy loan process and the option to package several properties together. Exerts say as long as investors are paying with cash, many people looking to purchase a new home with repaired credit may still face challenges.
People who experienced foreclosure or short sale could be eligible for a federal housing administration loan after three years.
