The East Bay Homes and Loans

Call Tony @ 925-777-9400 Housing affordability is about the best it’s ever been with Vallejo Real Estate for Sale, but
tight lending conditions have made it difficult for Vallejo buyers to take advantage of the
good conditions. For investors with cash, though, it’s a golden time to buy, and we are seeing
the Vallejo investor community step up. Its share of home purchases reached 2i percent in
August, a good part of that in all-cash transactions, because lending is especially tight for
Non-primary occupant Vallejo homes. For investors who can hire out or manage property
themselves, the attractive rates of return from rising Vallejo rental income is a strong lure.
Rents rose at a better than 3 percent annualized rate in the third quarter of 2011, government
data show, and private data sources imply even faster rent growth. Nor is there any reason to
believe this rent growth will cool, given the favorable demographics of a rising number of young
adults over the next 20 years, a high number of owners of foreclosed homes who can’t buy in the
near term, and the low construction rate of apartments. If annual rent gains stay near 3.2 percent,
rents will double in 20 years. If they reach 4 percent, rent doubling would occur in 14 years.
In addition to strong rent returns, investors can anticipate solid home price appreciation over
the long haul. Using 2000 as a normal year in which the market saw neither a bubble nor
a bust, the metrics on home prices in relation to consumer prices imply a 14 percent undervaluation,
and in relation to rental rates, a 20 percent undervaluation. With the bubble clearly gone, the future
home price path should follow the future rent growth path. That means home prices could also
double in 14 to 20 years, though it is unclear when home prices will begin to catch up with rents.
But long-term investors buying today are sure to catch some, if not most, of the upward ride.
For a view of Vallejo Real Estate for sale Click here http://www.eastbayhomeandloan.com/professional27.shtml